As soon as practicable after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

(1) Includes $11,250,000 principal of Notes subject to the Underwriters'
over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(3) Not currently determinable.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1997

PROSPECTUS

$75,000,000

[HEICO CORPORATION LOGO]

% CONVERTIBLE SUBORDINATED NOTES DUE 2004

HEICO CORPORATION ("HEICO" OR THE "COMPANY") IS OFFERING $75,000,000

AGGREGATE PRINCIPAL AMOUNT OF ITS ___% CONVERTIBLE SUBORDINATED NOTES DUE
, 2004 (THE "NOTES"). THE NOTES ARE CONVERTIBLE AT ANY TIME PRIOR TO
MATURITY, UNLESS PREVIOUSLY REDEEMED OR REPURCHASED, INTO SHARES OF COMMON
STOCK, PAR VALUE $.01 PER SHARE ("COMMON STOCK"), OF THE COMPANY AT A
CONVERSION RATE OF SHARES PER EACH $1,000 PRINCIPAL AMOUNT OF NOTES
(EQUIVALENT TO A CONVERSION PRICE OF APPROXIMATELY $ PER SHARE), SUBJECT
TO ADJUSTMENT IN CERTAIN CIRCUMSTANCES. SEE "DESCRIPTION OF NOTES--CONVERSION
OF THE NOTES." THE COMMON STOCK IS TRADED ON THE AMERICAN STOCK EXCHANGE UNDER
THE SYMBOL "HEI." ON , 1997, THE LAST REPORTED SALE PRICE FOR THE COMMON
STOCK WAS $ PER SHARE.

INTEREST ON THE NOTES IS PAYABLE ON AND OF EACH YEAR,
COMMENCING , 1998. THE NOTES ARE REDEEMABLE IN WHOLE OR IN PART AT THE
COMPANY'S OPTION AT ANY TIME ON OR AFTER , 2000, AT THE REDEMPTION PRICES
SET FORTH HEREIN, PLUS ACCRUED INTEREST TO THE DATE OF REDEMPTION. SEE
"DESCRIPTION OF NOTES--OPTIONAL REDEMPTION." THE NOTES ARE NOT ENTITLED TO ANY
SINKING FUND. THE NOTES WILL MATURE ON , 2004.

IN THE EVENT OF A CHANGE OF CONTROL (AS DEFINED HEREIN), EACH HOLDER OF
NOTES MAY REQUIRE THE COMPANY TO REPURCHASE ITS NOTES, IN WHOLE OR IN PART, FOR
CASH AT A REPURCHASE PRICE OF 100% OF THE PRINCIPAL AMOUNT OF NOTES TO BE
REPURCHASED, PLUS ACCRUED INTEREST TO THE REPURCHASE DATE. SEE "DESCRIPTION OF
NOTES --REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL."

THE NOTES ARE UNSECURED OBLIGATIONS SUBORDINATED IN RIGHT OF PAYMENT TO
ALL EXISTING AND FUTURE SENIOR INDEBTEDNESS (AS DEFINED HEREIN) OF THE COMPANY
AND EFFECTIVELY SUBORDINATED IN RIGHT OF PAYMENT TO ALL INDEBTEDNESS AND OTHER
LIABILITIES OF THE COMPANY'S SUBSIDIARIES. AS OF OCTOBER 31, 1997, AFTER GIVING
EFFECT TO THIS OFFERING AND THE APPLICATION OF NET PROCEEDS THEREFROM, THE
COMPANY'S SUBSIDIARIES WOULD HAVE HAD APPROXIMATELY $11 MILLION OF OUTSTANDING
INDEBTEDNESS, OF WHICH APPROXIMATELY $6 MILLION IS GUARANTEED BY THE COMPANY
AND CONSTITUTES SENIOR INDEBTEDNESS. THE INDENTURE (AS DEFINED HEREIN) WILL NOT
RESTRICT THE COMPANY OR ITS SUBSIDIARIES FROM INCURRING ADDITIONAL SENIOR

INDEBTEDNESS OR OTHER INDEBTEDNESS. SEE "DESCRIPTION OF NOTES--SUBORDINATION."

THE NOTES WILL NOT BE LISTED ON ANY SECURITIES EXCHANGE AND WILL ONLY BE

TRADED IN THE OVER-THE-COUNTER MARKET.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF

CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY POTENTIAL PURCHASERS OF THE NOTES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
================================================================================
PRICE TO DISCOUNT TO PROCEEDS TO
PUBLIC(1) UNDERWRITERS(2) COMPANY(3)
--------------------------------------------------------------------------------
Per Note ...... % % %
--------------------------------------------------------------------------------
Total(4) ...... $ $ $
================================================================================

(1) Plus accrued interest, if any, from date of issuance.
(2) The Company has agreed to indemnify the Underwriters (as defined herein)
against certain liabilities, including liabilities under the Securities
Act (as defined herein). See "Underwriting."
(3) Before deducting expenses payable by the Company, estimated to be $ .
(4) The Company has granted the Underwriters an option for 30 days to purchase
up to an additional $11,250,000 principal amount of Notes, solely for the
purpose of covering over-allotments, if any. If the Underwriters exercise
such option in full, the Price to Public, at the offering price shown
above, less the Underwriters' discount, Discount to Underwriters and
Proceeds to Company will be $ , $ and $ , respectively. See
"Underwriting."

THE NOTES ARE OFFERED BY THE UNDERWRITERS, SUBJECT TO PRIOR SALE, WHEN, AS
AND IF DELIVERED TO AND ACCEPTED BY THE UNDERWRITERS AND SUBJECT TO THE
UNDERWRITERS' RIGHT TO REJECT ORDERS IN WHOLE OR PART. IT IS EXPECTED THAT
DELIVERY OF THE NOTES WILL BE MADE ON OR ABOUT , 1997, AGAINST PAYMENT IN
IMMEDIATELY AVAILABLE FUNDS.

FORUM CAPITAL MARKETS L.P.

RAYMOND JAMES & ASSOCIATES, INC.

SOUTHEAST RESEARCH PARTNERS, INC.

The date of this Prospectus is , 1997.

[RESERVED FOR ART WORK]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OR THE
COMMON STOCK, INCLUDING OVER-ALLOTMENTS, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. SUCH TRANSACTIONS MAY BE EFFECTED
ON THE AMERICAN STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED

INFORMATION AND THE FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. EXCEPT AS OTHERWISE INDICATED,
THE INFORMATION IN THIS PROSPECTUS ASSUMES THAT THE UNDERWRITERS'
OVER-ALLOTMENT OPTION WILL NOT BE EXERCISED. AS USED HEREIN, THE TERM "COMPANY"
REFERS TO HEICO CORPORATION AND ITS CONSOLIDATED SUBSIDIARIES.

THE COMPANY

The Company is one of the world's largest non-OEM manufacturers of
FAA-approved jet engine replacement parts and a market leader in the sale of
certain ground support equipment ("GSE") to the airline and defense industries.
The Company's Flight Support Group, which currently accounts for approximately
70% of the Company's revenues, operates in the jet engine service market through
(i) the research and development, design, manufacture and sale of FAA-approved
jet engine replacement parts in direct competition with original equipment
manufacturers ("OEMs"), (ii) the repair, maintenance and overhaul of jet engine
and airframe components, and (iii) the manufacture of specialty aviation and
defense component parts as a subcontractor for OEMs and the U.S. government. The
Company's Ground Support Group, which currently accounts for approximately 30%
of the Company's revenues, manufactures various types of GSE, including ground
power, air start and air conditioning units, as well as certain electronic
equipment for commercial airlines and military agencies.

Through a combination of internal growth and acquisitions, the Company
increased revenues 35% from $25.6 million in the year ended October 31, 1995 to
$34.6 million in the year ended October 31, 1996 and earnings per share from
continuing operations 130% from $0.27 per share in the year ended October 31,
1995 to $0.62 in the year ended October 31, 1996. In addition, the Company
increased revenues and earnings per share from continuing operations from $23.0
million and $0.39 per share for the nine months ended July 31, 1996 to $44.5
million and $0.78 per share for the nine months ended July 31, 1997.

The Company's core strategy is to provide domestic and foreign commercial
air carriers (passenger and cargo) and aircraft repair (airmotive) companies
with an FAA-approved alternative source for certain jet engine parts at
substantial savings to the prices charged for functionally identical parts by
the respective jet engine OEMs which have historically been the sole source for
such replacement parts. The Company estimates the annual market for jet engine
repair, refurbishment and overhaul to be approximately $6.5 billion, of which
approximately $3.5 billion reflects annual sales of jet engine replacement
parts. According to GSE TODAY, a leading industry publication, the annual
worldwide commercial GSE market is approximately $1.5 billion. The Company
believes that the GSE market is highly fragmented, with a significant number of
participants supplying only one or two types of equipment.

GROWTH STRATEGIES

The Company intends to capitalize on its reputation for quality, its
research and development and manufacturing capabilities, existing customer
relationships and industry trends to continue to achieve profitable growth in a
number of niche aerospace markets. Specific components of the Company's growth
strategy include the following:

EXPANSION OF JET ENGINE REPLACEMENT PARTS PRODUCT LINES. The Company
intends to substantially broaden its current jet engine replacement parts
product lines through the development and receipt of additional Parts
Manufacturer Approvals ("PMAs") from the Federal Aviation Administration
("FAA"). The PMA approval process requires sophisticated computer aided design
technologies, advanced engineering and manufacturing capabilities, and depends
to a significant extent on the Company's established credibility with the FAA.
The Company believes that the PMA approval process creates a significant
barrier to entry as a result of both its technical demands and its limits on
the rate at which competitors can bring products to market.

3

EXPANSION OF GSE PRODUCT LINES. The Company expects that the planned
expansion of its Ground Support Group's manufacturing facility will permit the
Company to expand its GSE product lines. The Company believes that continued
expansion of its GSE product lines, in combination with its expanding jet
engine parts product lines and component overhaul capabilities, will provide
increased cross selling and marketing opportunities that will enable the
Company to capitalize on its reputation for quality products and the aviation
industry's trends toward outsourcing and vendor consolidation.

FORM STRATEGIC ALLIANCES. The Company seeks to form strategic alliances
that will allow it to accelerate the development of additional PMAs and provide
airlines with an alternative to the increased costs and occasional availability
and delivery problems many airlines have experienced related to OEM sole source
replacement parts. Pursuant to this objective, in October 1997 the Company
formed a strategic alliance between its Flight Support Group and Lufthansa
Technik AG, the technical services subsidiary of Lufthansa German Airlines
("Lufthansa"). Lufthansa is the world's largest independent provider of
engineering and maintenance services for aircraft and aircraft engines
supporting over 200 airlines, governments and other customers on a worldwide
basis. The objective of this Lufthansa strategic alliance is to (i) offer a
broadened line of FAA-approved jet engine replacement parts to the entire jet
engine maintenance market; (ii) offer airlines and airmotives a more responsive
and cost effective alternative to OEMs, and (iii) capitalize on Lufthansa's
established industry and customer relationships.

PURSUE ACQUISITIONS OF COMPLEMENTARY BUSINESSES. A key element of the
Company's strategy involves growth through acquisitions of other companies,
assets or product lines that complement or expand the Company's existing Flight
Support Group and Ground Support Group businesses. The Company believes that
acquisitions will enable it to capitalize on its fixed costs of operations and
further expand the aerospace products and services which it can offer to its
worldwide customer base. Accordingly, the Company intends to pursue an
aggressive acquisition strategy to gain market share in certain segments of the
fragmented aviation service and supply industry. The Company's acquisition of
Trilectron Industries, Inc. ("Trilectron") in September 1996 and Northwings
Accessories Corp. ("Northwings") in September 1997 exemplify the consolidation
opportunities that the Company believes are available. The Company is
continually evaluating acquisition opportunities that meet the Company's
criteria of a similar customer base, proprietary technologies and the
opportunity for consolidation. However, the Company has no current agreements
with respect to any acquisition and no assurance can be given that any of the
acquisitions currently being considered will be consummated.

The Company's principal executive offices are located at 3000 Taft Street,
Hollywood, Florida 33021, and its telephone number is (954) 987-4000.

RECENT DEVELOPMENTS

In September 1997, the Company purchased Northwings, an FAA-authorized
repair and overhaul facility that services aircraft engine parts and airframe
accessories, including fuel, hydraulic and pneumatic components. The purchase
price for Northwings was $10.5 million, consisting of approximately $7.0
million in cash and 155,000 shares of the Company's Common Stock. In the nine
months ended June 30, 1997, Northwings had revenues of approximately $6.4
million and operating income of approximately $1.9 million.

On October 30, 1997, the Company entered into a strategic alliance with
Lufthansa, whereby Lufthansa invested approximately $26 million in the
Company's Flight Support Group, including approximately $16 million to be paid
to the Flight Support Group over three years pursuant to a research and
development cooperation agreement which will partially fund accelerated
development of additional FAA-approved replacement parts for jet engines. In
addition, Lufthansa and the Flight Support Group have agreed to cooperate
regarding technical services and marketing support for jet engine parts on a
worldwide basis.

4

THE OFFERING

Notes Offered ............ $75,000,000 aggregate principal amount of %
Convertible Subordinated Notes due 2004. The
Company has granted the Underwriters a 30-day
option to purchase up to an additional $11,250,000
principal amount of Notes, solely for the purpose
of covering over-allotments.
Maturity Date .......... , 2004.
Interest Payment Dates . and , commencing , 1998.
Interest Rate .......... % per annum.
Conversion Rights ......... The Notes are convertible at the option of the
holder into Common Stock at any time prior to
maturity, unless previously redeemed or
repurchased, at a conversion rate of shares
per $1,000 principal amount of Notes (equivalent
to a conversion price of approximately $ per
share), subject to adjustment in certain
circumstances. See "Description of
Notes--Conversion of the Notes."
Subordination ............ The Notes are unsecured and subordinated to all
existing and future Senior Indebtedness. The Notes
are also effectively subordinated in right of
payment to all indebtedness and liabilities of the
Company's subsidiaries. At October 31, 1997, after
giving effect to this offering and the application
of the net proceeds therefrom, the Company's
subsidiaries would have had approximately $11
million of outstanding indebtedness, of which
approximately $6 million is guaranteed by the
Company and constitutes Senior Indebtedness. The
Indenture does not restrict the incurrence of
additional indebtedness by the Company or any of
its subsidiaries. See "Description of
Notes--Subordination."
Redemption at the Option
of the Company............ The Notes are not redeemable prior to ,
2000. Thereafter the Notes are redeemable at any
time and from time to time at the option of the
Company, in whole or in part, at the redemption
prices set forth herein, plus accrued and unpaid
interest to the date fixed for redemption. See
"Description of Notes--Optional Redemption by the
Company."
Repurchase at Option of
Holders Upon a Change of
Control................... Upon a Change of Control (as defined herein),
the Company will offer to repurchase the Notes
at a repurchase price equal to 100% of the
principal amount, plus accrued interest to the
date of repurchase. See "Description of
Notes--Repurchase at Option of Holders Upon a
Change of Control."
Use of Proceeds............ The Company intends to use the net proceeds of
this offering for working capital and general
corporate purposes, including possible
acquisitions. See "Use of Proceeds."
Listing and Trading
of Notes.................. The Notes will not be listed on any securities
exchange or on the American Stock Exchange and
will only be traded in the over-the-counter
market.
Common Stock............... The Common Stock issuable upon conversion of the
Notes will be listed on the American Stock
Exchange under the symbol "HEI."

(1) Gives effect to the Company's September 1996 acquisition of Trilectron, its
September 1997 acquisition of Northwings and its October 1997 sale to
Lufthansa of a 20% minority interest in the Company's Flight Support Group
as if each of such transactions had been consummated as of November 1,
1995.
(2) Gives effect to the Company's September 1997 acquisition of Northwings and
its October 1997 sale to Lufthansa of a 20% minority interest in the
Company's Flight Support Group as if each of such transactions had been
consummated as of November 1, 1995.
(3) Adjusted to reflect MediTek (as defined herein) as a discontinued
operation. The Company's 1996 results reflect a gain of $5.3 million from
the sale of MediTek.
(4) Represents Lufthansa's 20% minority interest in the net income of the
Company's Flight Support Group.
(5) Adjusted to reflect all stock dividends and stock splits.
(6) EBITDA is defined as earnings before the effects of interest, taxes,
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator used by many investors and analysts to
analyze and compare companies on the basis of operating performance.
EBITDA is not intended to represent cash flows for the period, nor has it
been presented as an alternative to operating income or as an indicator of
operating performance, should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles and may not be comparable to
similarly titled items of other companies.
(7) Gives effect to the Company's September 1997 acquisition of Northwings and
its October 1997 sale to Lufthansa of a 20% minority interest in the
Company's Flight Support Group as if each of such transactions had
occurred as of July 31, 1997.
(8) Adjusted to give effect to the issuance and sale of the Notes and the
receipt of the estimated proceeds therefrom. See "Use of Proceeds."
(9) Represents the 20% minority interest in the Company's Flight Support Group
acquired by Lufthansa.

6

RISK FACTORS

AN INVESTMENT IN THE NOTES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, IN
ADDITION TO THE OTHER INFORMATION INCLUDED AND INCORPORATED BY REFERENCE IN
THIS PROSPECTUS, IN CONNECTION WITH AN INVESTMENT IN THE NOTES OFFERED HEREBY.

THIS PROSPECTUS CONTAINS STATEMENTS THAT CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND SECTION 21E OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED (THE "EXCHANGE ACT"). THE WORDS "EXPECT," "ESTIMATE,"
"ANTICIPATE," "PREDICT," "BELIEVE" AND SIMILAR EXPRESSIONS AND VARIATIONS

THEREOF ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS
APPEAR IN A NUMBER OF PLACES IN THIS PROSPECTUS AND INCLUDE STATEMENTS
REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE COMPANY, ITS
DIRECTORS, OR ITS OFFICERS WITH RESPECT TO, AMONG OTHER THINGS: (I) TRENDS
AFFECTING THE AVIATION INDUSTRY GENERALLY AND THE SEGMENTS IN WHICH THE COMPANY

OPERATES; AND (II) THE COMPANY'S BUSINESS AND GROWTH STRATEGIES, INCLUDING ITS
RESEARCH AND DEVELOPMENT PLANS, ITS MANUFACTURE OF ADDITIONAL REPLACEMENT PARTS
AND POTENTIAL ACQUISITIONS. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH
FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE
RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
THOSE PREDICTED IN THE FORWARD-LOOKING STATEMENTS, AS A RESULT OF VARIOUS
FACTORS. THE ACCOMPANYING INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING

THE RISK FACTORS SET FORTH BELOW AS WELL AS INFORMATION CONTAINED IN
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS," "BUSINESS," AND THE COMPANY'S OTHER FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE SUCH
DIFFERENCES.

DEPENDENCE ON AVIATION INDUSTRY

The Company's operations are focused on the design, manufacture and sale
of jet engine replacement parts, repair and overhaul services on certain jet
engine and aircraft parts and the design and manufacture of GSE. Because the
Company's customers consist of aircraft operators, repair and overhaul
facilities that service aircraft operators, OEMs and the United States
government, the Company's business is impacted by the economic factors which
generally affect the aviation industry. When such factors adversely affect the
aviation industry, they tend to reduce the overall demand for jet engine
replacement parts, causing downward pressure on pricing and increasing the
credit risk associated with conducting business with industry participants.
There can be no assurance that economic and other factors which affect the
aviation industry will not have a material adverse effect on the Company's
business, financial condition and results of operations. See "Industry
Overview."

A number of the Company's existing and prospective customers are domestic
and foreign passenger airlines, freight carriers and aircraft leasing
companies, or service providers to such companies, all of which may suffer from
the factors which adversely affect the aviation industry. As a result, certain
of these customers may pose credit risks to the Company. The Company's
inability to collect receivables from a substantial sale could adversely affect
the Company's financial position and results of operations for a particular
period. Although the Company's bad debt loss was less than 1.0% of sales for
the year ended October 31, 1996 and for the nine months ended July 31, 1997,
there can be no assurance that the Company will not incur significant bad debt
losses in the future.

GOVERNMENT REGULATION

The repair and overhaul of aircraft engines is highly regulated by
governmental agencies throughout the world, including the FAA, and is
supplemented by guidelines established by OEMs which generally require that
engines be overhauled and certain engine parts be replaced after a certain
number of flight hours or cycles (take-offs and landings).

The jet engine replacement parts that the Company sells to its customers
must be accompanied by documentation which enables the customer to comply with
applicable regulatory requirements, as well as meet certain standards of
airworthiness established by the FAA or the equivalent regulatory agencies

7

in other countries. Specific regulations vary from country to country, although
regulatory requirements in other countries are generally satisfied by
compliance with FAA requirements. If material authorizations or approvals were
revoked or suspended, the operations of the Company would be adversely
affected. There can be no assurance that new and more stringent government
regulations will not be adopted in the future or that any such new regulations,
if enacted, would not have an adverse impact on the Company. See
"Business--Government Regulation."

DEPENDENCE ON THE JT8D AIRCRAFT ENGINE AFTERMARKET

The Company's business, financial condition and results of operations are
substantially influenced by the JT8D aircraft engine and engine parts.
Approximately 74% and 53% of the Company's net sales during the year ended
October 31, 1996 and the nine months ended July 31, 1997, respectively,
consisted of sales of replacement parts or repair and overhaul services for the
JT8D aircraft engine.

The aftermarket for JT8D aircraft engine parts is substantially influenced
by supply and demand. A significant increase in supply, as a result of an
unanticipated wind-down or liquidation of an air carrier operating a large
number of JT8D aircraft engines, or a reduction of demand, as a result of a
change in preferences or the imposition of regulations affecting the use of
JT8D aircraft engines, could have a material adverse effect on the Company's
business, financial condition and results of operations. For example, the FAA
and the European Union have implemented noise reduction regulations which
reduce the number of older model JT8D aircraft engines which may be operated in
the United States and the member nations of the European Union, respectively,
unless noise reduction equipment, known as "hush-kits," are added to the
aircraft engines. Additional noise restriction quotas imposed by communities
surrounding certain major European cities further restrict the operation of
hush-kitted aircraft engines in those markets. Failure to hush-kit JT8D
aircraft engines could significantly reduce the demand for JT8D aircraft
engines, resulting in a potential oversupply of JT8D aircraft engines and
engine parts which could decrease the value of the Company's inventory and have
a material adverse effect on the Company's business, financial condition and
results of operations. There can be no assurance that aircraft operators will
hush-kit their remaining older model JT8D aircraft engines rather than replace
them with newer, quieter aircraft engines. Furthermore, other regulations in
both the United States and the European Union impose more stringent inspection,
upgrading, maintenance and retrofit requirements on aging aircraft and aircraft
engines which increase the cost of operating older model aircraft and aircraft
engines. In addition, the United States Environmental Protection Agency (the
"EPA") and various agencies of the European Union have sought the adoption of
stricter standards limiting the emissions of nitrous oxide from aircraft
engines. If such measures are adopted, the utilization of JT8D aircraft engines
could become substantially more costly in the event modifications must be made
to bring aircraft engines into compliance. See "Business--Government
Regulation."

As a result of its focus on the JT8D aircraft engine, the Company has
limited experience with engine parts for other aircraft engine types. It will
be necessary for the Company to expand its business to other aircraft engine
types in preparation for the eventual decline in the JT8D aircraft engine
aftermarket. There can be no assurance that the Company will be able to
profitably expand into new markets with other aircraft engines or that
structural differences in those emerging after markets will allow the Company
to achieve acceptable levels of net sales and gross profit.

COMPETITION

The Company faces significant competition in each of its businesses. The
Company's PMA replacement parts divisions compete primarily with the industry's
leading jet engine OEMs. The overhaul and repair divisions of the Company's
Flight Support Group compete with (i) major commercial airlines, many of which
operate their own maintenance and overhaul units, (ii) OEMs, which manufacture,
repair and overhaul their own parts and (iii) other independent service
companies. The Company's Ground Support Group competes in a highly fragmented
marketplace with a small number of well capitalized companies.

8

The aviation aftermarket supply industry is highly fragmented, has several
highly visible leading companies and is characterized by intense competition.
Certain of the Company's competitors have substantially greater name
recognition, complementary lines of business and financial, marketing and other
resources than the Company. In addition, OEMs, aircraft maintenance providers,
leasing companies and FAA-certificated repair facilities may vertically
integrate into the supply industry, thereby significantly increasing industry
competition. Moreover, smaller competitors of the Company may be in a position
to offer more attractive pricing of parts as a result of lower labor costs or
other factors. A variety of potential actions by any of the Company's
competitors, including a reduction of product prices or the establishment by
competitors of long-term relationships with new or existing customers, could
have a material adverse effect on the Company's business, financial condition
and results of operations. There can be no assurance that the Company will
continue to compete effectively against present or future competitors or that
competitive pressures will not have a material and adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Competition."

LITIGATION

In November 1989, the Flight Support Group was named a defendant in a
complaint filed by United Technologies Corporation ("UTC") in the United States
District court for the Southern District of Florida. The complaint, as amended
in 1995, alleged infringement of a patent, misappropriation of trade secrets
and unfair competition relating to certain jet engine parts and coatings sold
by the Flight Support Group in competition with Pratt & Whitney, a division of
UTC and sought damages of approximately $30.0 million. Although the Company
believes that it will prevail and intends to vigorously pursue its
counterclaims against UTC, the ultimate outcome of this litigation is not
certain and the legal costs, management efforts and other resources that are
expected to continue to be incurred by the Company in defending itself against
this action could be substantial. There can be no assurance that the lawsuit
will not have a material adverse effect on the Company's business, results of
operations or financial condition. See "Business--Legal Proceedings."

PRODUCT LIABILITY AND CLAIMS EXPOSURE

The Company's jet engine replacement parts and repair and overhaul
services expose it to potential liabilities for personal injury or death as a
result of the failure of an aircraft component that has been designed,
manufactured or serviced by the Company. The commercial aviation industry is
prone to catastrophic losses which often exceed policy limits. While the
Company believes that its liability insurance is adequate to protect it from
such liabilities and no material claims have been made against the Company, no
assurance can be given that claims will not arise in the future or that such
insurance coverage will be adequate. An uninsured or partially insured claim,
or a claim for which third-party indemnification is not available, could have a
material adverse effect upon the Company. Additionally, there can be no
assurance that insurance coverage can be maintained in the future at an
acceptable cost. Any such liability not covered by insurance or for which third
party indemnification is not available could have a material adverse effect on
the business, financial condition or results of operations of the Company.

SUBORDINATION OF THE NOTES

The Notes will be unsecured and subordinated in right of payment in full
to all existing and future Senior Indebtedness of the Company. As a result of
such subordination, in the event of the Company's liquidation or insolvency,
payment default with respect to Senior Indebtedness, a covenant default with
respect to Senior Indebtedness, or upon acceleration of the Notes due to an
Event of Default (as defined herein), the assets of the Company will be
available to pay obligations on the Notes only after all Senior Indebtedness
has been paid in full, and there may not be sufficient assets remaining to pay
amounts due on any or all of the Notes then outstanding. The Company may from
time to time incur additional indebtedness constituting Senior Indebtedness.
The Notes are also effectively subordinated in right of payment to all
indebtedness and other liabilities, including trade payables, of the Company's

9

subsidiaries. The Indenture does not prohibit or limit the incurrence of Senior
Indebtedness or other indebtedness and other liabilities by the Company or its
subsidiaries. The incurrence of additional indebtedness and other liabilities
by the Company or its subsidiaries could adversely affect the Company's ability
to pay its obligations on the Notes. In addition, the cash flow and ability of
the Company to service debt, including the Notes, may in the future become
dependent in part upon the earnings from the business conducted by the Company
through subsidiaries and distribution of those earnings, or upon loans or other
payments of funds by those subsidiaries to the Company. As of October 31, 1997,
after giving effect to this offering and the application of the net proceeds
therefrom, the Company's subsidiaries would have had approximately $11 million
of outstanding indebtedness, of which approximately $6 million is guaranteed by
the Company and constitutes Senior Indebtedness. See "Description of
Notes--Subordination."

MANAGEMENT OF GROWTH

The Company has experienced rapid growth in recent years and intends to
continue to pursue an aggressive growth strategy, both through acquisitions and
internal expansion of its products and services. The growth experienced by the
Company to date has placed, and could continue to place, significant demands on
the Company's administrative and operational resources. There can be no
assurance that the Company will be able to achieve growth effectively or manage
any such growth successfully, and the failure to do so could have a material
adverse effect on the Company's business, financial condition and results of
operations.

A key element of the Company's strategy has been, and continues to be,
growth through the acquisition of additional companies engaged in the aviation
industry. The Company's ability to grow by acquisition is dependent upon, and
may be limited by, the availability of suitable acquisition candidates and
capital. In addition, growth by acquisitions involves risks that could
adversely affect the Company's operating results, including diversion of
management's attention, difficulties in integrating the operations and
personnel of acquired companies, the potential amortization of acquired
intangible assets and the potential loss of key employees of acquired
companies. There can be no assurance that the Company will be able to obtain
the capital necessary to pursue its acquisition strategy, consummate
acquisitions on satisfactory terms or, if any such acquisitions are
consummated, satisfactorily integrate such acquired businesses into the
Company. In addition, future acquisitions could result in the use of a
significant portion of the Company's available cash, or if such acquisition is
made utilizing the Company's securities, could result in significant dilution
to the Company's shareholders. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources"
and "Business--Growth Strategies."

ENVIRONMENTAL LIABILITIES

The Company's business operations and facilities are subject to a number
of federal, state and local environmental laws and regulations. Although the
Company believes that its operations and facilities are in material compliance
with such laws and regulations, there can be no assurance that future changes
in such laws, regulations or interpretations thereof or the nature of the
Company's operations will not require the Company to make significant
additional capital or operating expenditures, or changes in operational
procedures to ensure compliance in the future. The Company does not maintain
environmental liability insurance, and if the Company were required to pay the
expenses related to these environmental liabilities, such expenses could have a
material adverse effect on the business, financial condition or results of
operations of the Company. See "Business--Government Regulation."

CUSTOMER CONCENTRATION

Although no individual customer directly accounted for more than 10% of
the Company's combined net sales during the fiscal year ended October 31, 1996,
the Company's net sales to its five largest customers accounted for
approximately 35% of total net sales. The continuing consolidation of various
segments of the aviation industry, including vertical integration of OEMs and
repair and

10

overhaul businesses, could significantly increase the concentration of the
Company's customer base. The loss of, or significant curtailments of purchases
by, the Company's significant customers could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Business--Sales, Marketing and Customers."

TECHNOLOGICAL DEVELOPMENTS

The aviation industry is constantly undergoing development and change and,
accordingly, it is likely that new products, equipment and methods of repair
and overhaul service will be introduced in the future. In order to keep pace
with any new developments, the Company may need to expend significant capital
to purchase new equipment and machines, to train its employees in the new
methods of production and service or to conduct research and development
activities. There can be no assurance that the Company will be successful in
developing new products or that such capital expenditures will not have a
material adverse effect on the Company. In addition, the Company's competitors
may develop methodologies that could potentially preclude the Company from the
design and manufacture of certain jet engine replacement parts and, as a
result, could have a material adverse effect on the Company.

DEPENDENCE ON KEY PERSONNEL

The Company's success is substantially dependent on the performance,
contributions and expertise of its senior management team, as well as
engineering and other technical employees. The loss of the services of any of
its executive officers or other key employees or the Company's inability to
continue to attract, retain or motivate the necessary personnel could have a
material adverse effect on the business, financial condition and results of
operations of the Company. See "Management."

CONTROL BY PRINCIPAL SHAREHOLDERS

As of the date of this Prospectus, the Company's executive officers and
entities controlled by the Company's executive officers, the Company's 401(k)
Plan, and members of the Board of Directors collectively beneficially own
approximately 42% of the Company's outstanding Common Stock. Accordingly, such
persons will be able to substantially influence the election of members of the
Company's Board of Directors and the control of the business, policies and
affairs of the Company. See "Principal Shareholders."

DISCRETION IN USE OF PROCEEDS

The Company intends to use all of the net proceeds from this offering for
working capital and general corporate purposes, including possible
acquisitions. As of the date of this Prospectus, the Company cannot specify
with certainty the particular uses for the net proceeds to be added to its
working capital. Accordingly, the Company will have broad discretion in the
application of such net proceeds. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

FACTORS INHIBITING TAKEOVER

Certain provisions of the Company's Amended Articles of Incorporation (the
"Articles") and Bylaws (the "Bylaws") may be deemed to have anti-takeover
effects and may discourage, delay, defer or prevent a takeover attempt that a
shareholder might consider in its best interest. These provisions (i) establish
certain advance notice procedures for nomination of candidates for election as
directors and for shareholder proposals to be considered at annual
shareholders' meetings, (ii) provide that special meetings of the shareholders
may be called by the Chairman of the Board of Directors (the "Board"), the
President of the Company or by a majority of the Board, and (iii) authorize the
issuance of 10,000,000 shares of preferred stock with such designations,
rights, preferences and limitations as may be determined from time to time by
the Board. Accordingly, the Board is empowered, without

11

shareholder approval, to issue preferred stock with dividend, liquidation,
conversion, voting or other rights that could adversely affect the voting
powers or other rights of holders of the Company's Common Stock. In addition,
in November 1993, the Company declared a distribution of a preferred stock
purchase right (the "Rights") for each outstanding share of Common Stock. Such
Rights trade with the Common Stock and are not exercisable or transferable
apart from the Common Stock until a person or group acquires 15% or more of the
outstanding Common Stock or commence or announce an intention to commence a
tender offer for 30% or more of the outstanding Common Stock. The Rights, which
expire on November 2, 2003, will cause substantial dilution to a person or a
group who attempts to acquire the Company on terms not approved by the Board or
who acquires 15% or more of the outstanding Common Stock without approval of
the Board. Furthermore, certain provisions of the Florida Business Corporation
Act may be deemed to have the effect of delaying, deferring or preventing a
change in control of the Company. See "Description of Capital
Stock--Anti-Takeover Effects of Certain Provisions of Florida Law and the
Company's Articles of Incorporation and Bylaw."

LIMITATIONS ON REPURCHASE OF NOTES UPON CHANGE OF CONTROL

In the event of a Change of Control (as defined in "Description of
Notes--Repurchase at the Option of Holders upon Change of Control"), the
Company will offer to repurchase the Notes at a repurchase price equal to 100%
of the principal amount, plus accrued interest to the date of repurchase. The
Company's ability to repurchase the Notes upon a change of control may be
limited by the terms of the Company's Senior Indebtedness and the subordination
provisions of the Indenture and may be prohibited or limited by, or create an
Event of Default (as defined in the Indenture) under, the terms of agreements
related to borrowings which the Company may enter into from time to time,
including agreements relating to Senior Indebtedness. Further, the ability of
the Company to repurchase the Notes upon a change of control will be dependent
on the availability of sufficient funds and compliance with applicable
securities laws. Accordingly, there can be no assurance that the Company will
be able to repurchase the Notes upon a change of control. Failure of the
Company to repurchase Notes at the option of the holder upon a change of
control would result in an Event of Default (as defined in the Indenture) under
the Notes, which could in turn result in acceleration of the payment of other
indebtedness of the Company at the time outstanding pursuant to cross-default
provisions.

The term "change of control" is limited to certain specified transactions
and may not include other events that might adversely affect the financial
condition of the Company or result in a downgrade of the credit rating of the
Notes, nor would the requirement that the Company offer to repurchase the Notes
upon a change of control necessarily afford holders of the Notes protection in
the event of a highly leveraged transaction, reorganization, merger or similar
transaction involving the Company.

ABSENCE OF PUBLIC MARKET FOR THE NOTES

The Notes will be a new issue of securities with no established trading
market. The Underwriters have advised the Company that they intend to make a
market in the Notes. The Underwriters are not obligated, however, to make a
market in the Notes, and any such market making may be discontinued at any time
at the sole discretion of the Underwriters without notice. There can be no
assurance that an active market for the Notes will develop and continue upon
completion of this offering or that the market price of the Notes will not
decline. Various factors such as changes in prevailing interest rates or
changes in perceptions of the Company's creditworthiness could cause the market
price of the Notes to fluctuate significantly. The trading price of the Notes
could also be significantly affected by the market price of the Common Stock,
which could be subject to wide fluctuations in response to a variety of
factors, including quarterly variations in operating results, announcements of
technological innovations or new products by the Company or its competitors,
general conditions in the aviation industry and general economic and market
conditions. The Notes will not be listed on any securities exchange and will
only be traded in the over-the-counter market.

12

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Notes offered hereby,
after deducting the estimated underwriting discount and expenses of this
offering, will be approximately $ million ($ million if the Underwriters'
over-allotment option is exercised in full). The Company intends to use all of
the net proceeds for working capital and general corporate purposes, including
potential acquisitions. Although the Company continually reviews and evaluates
acquisitions, the Company currently has no agreements with respect to any
acquisition. See "Risk Factors--Management of Growth", "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and "Business--Growth Strategies."

Pending use of the net proceeds from this offering as discussed above, the
Company intends to make temporary investments in United States dollar
denominated short-term high quality investments.

13

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
July 31, 1997 (i) on an actual basis, (ii) on a pro forma basis to give effect
to the Company's September 1997 acquisition of Northwings and to Lufthansa's
October 1997 acquisition of a 20% interest of the Company's Flight Support
Group; and (iii) pro forma as adjusted to give effect to the issuance and sale
of the Notes and the application of the net proceeds therefrom. This table
should be read in conjunction with the Consolidated Financial Statements and
Notes and Pro Forma Consolidated Condensed Financial Statements included
elsewhere in this Prospectus.

(1) Adjusted to give effect to the Company's September 1997 acquisition of
Northwings and its October 1997 sale of a 20% minority interest in the
Company's Flight Support Group. See "Pro Forma Consolidated Condensed
Financial Statements."

(2) Adjusted to give effect to the Company's September 1997 acquisition of
Northwings and its October 1997 sale of a 20% minority interest in the
Company's Flight Support Group to Lufthansa, as well as issuance and sale
of the Notes and the application of the estimated net proceeds therefrom.
See "Use of Proceeds."

(3) Represents the 20% minority interest in the Company's Flight Support Group
acquired by Lufthansa.

(4) Excludes (i) 1,656,283 shares of Common Stock issuable upon the exercise of
outstanding options which have a weighted average exercise price of $8.85
per share, and (ii) 110,306 shares of Common Stock reserved for future
issuance under the Company's 1993 Plan and Non-Qualified Plan.

14

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

The Common Stock is traded on the American Stock Exchange under the symbol
"HEI." The following table sets forth, for the periods indicated, the high and
low closing sales prices for the Common Stock as reported on the American Stock
Exchange, as well as the amount of cash dividends paid per share during such
periods. In February 1996 and July 1996 the Company paid 10% stock dividends in
addition to its semi-annual cash dividends. The Company also distributed a
three-for-two stock split in April 1996. In December 1996, the Company declared
another 10% stock dividend in addition to a semi-annual cash dividend, both
payable in January 1997. The quarterly closing sales prices and cash dividend
amounts set forth below have been retroactively adjusted for all stock splits
and stock dividends.

The selected data as of and for the years ended October 31, 1992 through
1996 have been derived from the audited financial statements of the Company.
The selected data as of and for the nine months ended July 31, 1996 and 1997
have been derived from the unaudited financial statements of the Company which,
in the opinion of the Company, include all adjustments (consisting of only
normal recurring adjustments) necessary for a fair presentation of the
information set forth therein. The results of operations for the nine month
period ended July 31, 1997 are not necessarily indicative of the results for
the full year. The following data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", the Company's Financial Statements and Notes thereto and the
Company's Pro Forma Consolidated Condensed Financial Statements included or
incorporated elsewhere in this Prospectus.

(1) Gives effect to the Company's September 1996 acquisition of Trilectron, its
September 1997 acquisition of Northwings and its October 1997 sale to
Lufthansa of a 20% minority interest in the Company's Flight Support Group
as if each of such transactions had been consummated as of November 1,
1995.
(2) Gives effect to the Company's September 1997 acquisition of Northwings and
its October 1997 sale to Lufthansa of a 20% minority interest in the
Company's Flight Support Group as if each of such transactions had been
consummated as of November 1, 1995.
(3) Adjusted to reflect MediTek (as defined herein) as a discontinued
operation. The Company's 1996 results reflect a gain of $5.3 million from
the sale of MediTek.
(4) Represents Lufthansa's 20% minority interest in the net income of the
Company's Flight Support Group.
(5) Adjusted to reflect all stock dividends and stock splits.
(6) EBITDA is defined as earnings before the effects of interest, taxes,
depreciation and amortization. EBITDA is presented because it is a widely
accepted financial indicator used by many investors and analysts to
analyze and compare companies on the basis of operating performance.
EBITDA is not intended to represent cash flows for the period, nor has it
been presented as an alternative to operating income or as an indicator of
operating performance, should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles and may not be comparable to
similarly titled items of other companies.
(7) Gives effect to the Company's September 1997 acquisition of Northwings and
its October 1997 sale to Lufthansa of a 20% minority interest in the
Company's Flight Support Group as if each of such transactions had
occurred as of July 31, 1997.

17

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company's Flight Support Group, which currently accounts for
approximately 70% of the Company's revenues, consists of four operating
subsidiaries -- Jet Avion Corporation (PMA replacement parts), LPI Industries
Corporation (OEM subcontractor), Aircraft Technology, Inc. (jet engine
combustion chamber and related parts repair and overhaul) and Northwings
Accessories Corp. (jet engine component and airframe repair and overhaul). The
Company's Ground Support Group, which currently accounts for approximately 30%
of the Company's revenues, consists of one operating subsidiary -- Trilectron
Industries, Inc. (ground support equipment).

The Company's results of operations during the current and prior fiscal
years have been affected by a number of significant transactions. As a result
of the significant impact of these transactions, the Company does not believe
that its results of operations are necessarily comparable on a period-to-period
basis. This discussion of the Company's financial condition and results of
operations should be read in conjunction with the Company's Consolidated
Condensed Financial Statements--Unaudited, Pro Forma Consolidated Condensed
Financial Statements--Unaudited and Notes thereto included or incorporated by
reference herein.

SALE OF DISCONTINUED HEALTHCARE OPERATIONS. In July 1996, the Company sold
its wholly owned healthcare subsidiary, MediTek Health Corporation ("MediTek")
to U.S. Diagnostic Inc. ("USDL"). The Company received $13.8 million in cash
and a $10.0 million, 6-1/2% convertible promissory note (the "Convertible
Note"). The sale of MediTek resulted in a fiscal 1996 gain of $5.3 million. In
September 1997, the Company sold the Convertible Note to one of the
Underwriters for its stated par value of $10.0 million plus accrued interest.

ACQUISITION OF TRILECTRON GROUND SUPPORT BUSINESS. In September 1996, the
Company acquired Trilectron, a Florida-based manufacturer of GSE, for $7.0
million in cash and the assumption of approximately $2.3 million of debt.
During the ten months ended August 31, 1996 Trilectron had net sales of
approximately $13.6 million and income before income taxes of approximately
$1.2 million. Approximately $2.8 million of goodwill associated with the
Trilectron acquisition is being amortized over a 20-year period using the
straight line method.

ACQUISITION OF NORTHWINGS REPAIR/OVERHAUL BUSINESS. In September 1997, the
Company acquired Northwings, a Florida-based repair and overhaul facility
servicing aircraft engine airframe accessories, for approximately $7.0 million
in cash and 155,000 shares of the Company's Common Stock. Approximately $8.9
million of goodwill associated with the Northwings acquisition is being
amortized over a 20-year period using the straight line method.

LUFTHANSA INVESTMENT IN FLIGHT SUPPORT GROUP. In October 1997, the Company
entered into a strategic alliance with Lufthansa pursuant to which Lufthansa
invested approximately $26 million in the Company's Flight Support Group,
including approximately $16 million to be paid to the Flight Support Group over
three years pursuant to a research and development cooperation agreement which
will partially fund accelerated development of additional FAA-approved
replacement parts for jet engines. In addition, Lufthansa and the Flight
Support Group have agreed to cooperate regarding technical services and
marketing support for jet engine parts on a worldwide basis.

For additional information with respect to the financial impact of the
Company's Trilectron, Northwings and Lufthansa transactions, see the Pro Forma
Consolidated Condensed Financial Statements appearing elsewhere in this
Prospectus.

For the first nine months of fiscal 1997, net sales and net income totaled
$44.5 million and $4.9 million ($.78 per share), respectively, representing a
94% increase over net sales from continuing

18

operations of $23.0 million in the first nine months of fiscal 1996 and a 113%
increase over net income from continuing operations of $2.3 million ($.39 per
share) in the first nine months of fiscal 1996.

Net sales of the newly-acquired Company's Ground Support Group totaled
$16.1 million in the first nine months of fiscal 1997, all of which represented
sales of Trilectron.

The balance of the increases in net sales in the fiscal 1997 nine-month
period over the comparable fiscal 1996 period are attributable to the increased
sales of the Company's Flight Support Group, which are principally due to
increased sales volumes of jet engine replacement parts to the Company's
commercial airline customers.

The Company's gross profit margins were 31.8% in the first nine months of
fiscal 1997, and 34.5% in the first nine months of fiscal 1996. This reflects
the inclusion of the newly-acquired Ground Support Group, which sells products
that generally carry lower gross profit margins than those of the Flight
Support Group. The decrease in gross profit margins attributable to the Ground
Support Group was partially offset by an improvement in gross profit margins in
the Flight Support Group. The improvement in gross profit margins in the Flight
Support Group reflects volume increases in sales of higher gross profit margin
products and manufacturing cost efficiencies.

Selling, general and administrative ("SG&A") expenses in the first nine
months of fiscal 1997 increased $2.7 million to $7.8 million from $5.1 million
in the first nine months of fiscal 1996. The increase from fiscal 1996 is due
principally to the SG&A expenses of Trilectron and increased selling expenses
of the Flight Support Group. As a percentage of sales, however, SG&A expenses
decreased to 17.5% of consolidated net sales in the first nine months of fiscal
1997 from 22.1% in the comparable nine-month period of fiscal 1996.

Income from operations for the first nine months of fiscal 1997 increased
$3.5 million to $6.4 million from $2.9 million in the first nine months of last
year. This increase reflects the increase in sales and gross profit margins of
the Flight Support Group and the acquisition of the Ground Support Group as
discussed above.

Interest expense in the first nine months of fiscal 1997 increased
$190,000 to $319,000 from $129,000 in the comparable fiscal 1996 period. This
increase is principally due to the interest incurred on the industrial
development revenue bonds discussed below.

Interest and other income in the first nine months of fiscal 1997
increased $683,000 to $1.3 million from $617,000 in the comparable period in
fiscal 1996. This increase is principally due to interest income on the
Convertible Note received from the sale of MediTek in July 1996 and higher cash
balances available for investment.

The Company's effective tax rate of 32.7% for the first nine months of
fiscal 1997 was comparable with the 32.1% rate in the first nine months of
fiscal 1996.

BACKLOG

The Company's Flight Support Group had a backlog which totaled
approximately $28.0 million as of July 31, 1997. The backlog includes
approximately $16.0 million representing forecasted shipments over the next 12
months for certain contracts pursuant to which customers provide estimated
annual usage. The current backlog increased over the October 31, 1996 backlog
of approximately $14.0 million principally due to certain customers entering
into longer term contracts which replaced shorter term purchase orders.
Substantially all of this backlog of orders is expected to be delivered within
the next twelve months.

19

The Company's Ground Support Group had a backlog totaling $12.0 million as
of July 31, 1997. This is a 9% increase over the October 31, 1996 backlog
balance of $11.0 million and is principally due to receipt of a contract
approximating $4.0 million in the first quarter of fiscal 1997 covering
deliveries expected to begin in fiscal 1997 and continue into fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCES

During the first nine months of fiscal 1997, net cash used in operating
activities was $285,000, reflecting net income of $4.9 million offset primarily
by increases in inventories of $2.6 million required to meet increased sales
and faster customer delivery requirements and scheduled payments of trade
accounts payable, income taxes, and other current liabilities.

The Company's principal investing activities during the first nine months
of fiscal 1997 were purchases of property, plant and equipment of $2.8 million,
including $1.2 million related to the Series 1996 industrial development
revenue bond project.

The Company's principal financing activities during the first nine months
of fiscal 1997 were $2.3 million in proceeds of long-term debt including $1.3
million in reimbursements for qualified expenditures from the Series 1996
industrial development revenue bonds and $1.0 million representing the receipt
of funds from the exercise of stock options.

As discussed in Note 3 of the Company's Notes to Consolidated Condensed
Financial Statements (unaudited) contained herein, industrial development
revenue bonds in the amount of $4.0 million were issued by Manatee County,
Florida, to be used to construct and equip the Company's new Trilectron
manufacturing facility in Palmetto, Florida. As of July 31, 1997, unexpended
bond proceeds of $4.0 million were available for qualified expenditures of the
Trilectron facility. In addition, the Company has unexpended bond proceeds of
$1.4 million available for qualified expenditures pursuant to its Broward
County Series 1996 industrial development revenue bond project.

The revolving portion of the Company's $7.0 million credit facility, which
was to expire in April 1997, was renewed by mutual agreement until November 30,
1997. The Company expects to seek a further renewal of this facility after this
offering. In addition, amounts available under the Company's equipment loan
facility were increased to $2.0 million and extended to December 1997.

The Company believes that the proceeds of this offering, operating cash
flow and available borrowings under the Company's equipment loan facility,
revolving credit facility and industrial revenue bond financings will be
sufficient to fund the Company's operations for the foreseeable future.

20

INDUSTRY OVERVIEW

GENERAL

The Company operates in two distinct but interrelated aerospace markets -
the jet engine service market and the ground service equipment market.

THE JET ENGINE SERVICE MARKET. Jet engine maintenance is a highly
regulated, ongoing process that typically accounts for approximately 6% of an
aircraft's operating costs. FAA regulations require "cradle to grave"
documentation of an engine's service life, as well as of the individual parts
that comprise it. Maintenance schedules call for the periodic inspection,
testing and repair of critical parts, as well as periodic overhauls (a complete
disassembly, refurbishment, reassembly and testing process) of the entire
engine. The maintenance schedule for any given engine depends on the number of
flight hours registered and the number of an engine's take-off and landing
cycles.

The Company believes that the annual market for jet engine repair,
refurbishment and overhaul is approximately $6.5 billion, of which
approximately $3.5 billion reflects annual sales of jet engine replacement
parts. Maintenance activity is accomplished through three primary channels -
(i) internal airline maintenance capabilities, (ii) OEMs, and (iii) independent
repair/overhaul facilities service providers ("airmotives"). Based on industry
sources, the Company believes that airlines continue to dominate this industry
with an estimated two-thirds market share, but also that OEMs and independent
airmotives are gaining market share as airlines continue to rationalize costs
and reduce non-core practices by outsourcing non-revenue producing activities
such as maintenance.

The Company designs, manufactures and sells jet engine replacement parts
in direct competition with Pratt & Whitney and other leading industry OEMs and,
to a lesser extent, with a number of smaller, independent parts manufacturers.
The Flight Support Group's repair and overhaul services compete with
participants in all three of the industry's maintenance channels.

THE GROUND SERVICE EQUIPMENT MARKET. Aircraft require a wide array of
mobile and fixed GSE to support their operation. According to GSE TODAY, the
annual worldwide commercial GSE market is approximately $1.5 billion and will
grow approximately 7.5% annually worldwide over the next five years. GSE
industry growth depends on the health of the commercial aviation industry. The
Company believes that the GSE market is highly fragmented, with a significant
number of participants supplying only one or two types of GSE.

INDUSTRY TRENDS

The Company expects to capitalize on a number of trends within the
aviation industry, including the following:

GROWTH IN AIRCRAFT TRAFFIC AND FLEET. Continued growth in air transit and
aircraft production is expected to increase the demand for engine component
purchases and repairs, as well as sales of GSE. According to Boeing's 1996
Market Outlook, it is estimated that (i) world air travel will grow by 70% by
2005, (ii) the number of passenger and freight and package delivery aircraft in
service will increase by 47% by 2005, (iii) the worldwide fleet of commercial
airplanes is expected to more than double from 11,066 airplanes at the end of
1995 to 23,081 airplanes by 2015 and (iv) the worldwide fleet of cargo jet
aircraft will increase from 1,219 airplanes in 1995 to 2,260 airplanes by 2015.
Further, the Company believes that the number of planes in service for more
than 10 years is continuing to increase, and these older planes are the primary
market for jet engine replacement parts and repair and overhaul services.
Moreover, because certain parts must be replaced after a specified number of
flight hours or cycles, demand in the aftermarket segments served by the
Company is more predictable and less cyclical than the market for new part
deliveries.

Deregulation of the aviation industry in the United States and the
European Community, relatively low barriers to entry, the availability of older
aircraft and increased consumer demand for air travel has

21

led to the emergence of several low cost, start-up airlines. Start-up airlines
tend to use older aircraft with engines that require a greater number of
replacement parts and more frequent servicing. Moreover, because start-up
airlines generally do not invest in the infrastructure necessary to service
their aircraft, many outsource all or a substantial portion of their jet engine
service and replacement parts requirements. Consequently, the Company believes
that the growth of start-up airlines is increasing demand for the services of
its Flight Support Group.

INCREASED OUTSOURCING OF COMMERCIAL ENGINE SERVICES. Airlines have come
under increasing pressure during the last decade to reduce the costs associated
with providing air transportation services. While several of the expenditures
required to operate an airline are beyond the direct control of airline
operators (e.g., the price of fuel and labor costs), the Company believes that
the continuing pressure to reduce both the operating and capital costs
associated with jet engine service should continue to increase the market share
of OEMs and independent service providers such as the Company. The Company
believes that as a result of this outsourcing trend, the volume of business
handled by OEMs and independent service providers such as the Company in the
jet engine maintenance, repair and overhaul industry should grow faster than
the growth in air traffic.

CONSOLIDATION OF THE SERVICE AND SUPPLY CHAIN. In order to reduce
purchasing costs and streamline purchasing decisions, airline purchasing
departments have been reducing the number of their "approved" suppliers. The
Company believes that the reductions in the supplier base utilized by airline
purchasing departments will continue to cause a consolidation in both the jet
engine repair and GSE markets for the foreseeable future. The Company further
believes that only those participants with a reputation for quality and
adequate capital resources will continue to be selected as approved suppliers
and survive such consolidation. The Company believes that it is well positioned
to take advantage of this consolidation trend.

INCREASED MAINTENANCE AND SAFETY REQUIREMENTS. Under regulations
promulgated by the FAA and similar agencies in other countries, as well as
guidelines established by OEMs and aircraft operators, when an aircraft
component fails to perform within certain prescribed limits or after logging a
prescribed number of flight hours, the aircraft component must be brought to a
repair facility certified by the FAA or similar agency of a foreign nation for
various types of designated service or replacement. In addition, aircraft
components require regular maintenance and inspection and replacement of "life-
limited" components. The Company believes that the trend toward more stringent
maintenance requirements and more frequent maintenance and overhaul has
increased the size of the market for the replacement or repair of jet engine
components. The Company believes that, because of its established ability to
satisfy the FAA's PMA approval process and its long-standing emphasis on
quality control, it will benefit from the evolving maintenance and safety
standards.

22

BUSINESS

GENERAL

The Company is one of the world's largest non-OEM manufacturers of
FAA-approved jet engine replacement parts and a market leader in the sale of
GSE to the airline and defense industries. The Company's Flight Support Group,
which currently accounts for approximately 70% of the Company's revenues,
operates in the jet engine service market through (i) the research and
development, design, manufacture and sale of FAA-approved jet engine
replacement parts in direct competition with OEMs, (ii) the repair, maintenance
and overhaul of jet engine and airframe components, and (iii) the manufacture
of specialty aviation and defense component parts as a subcontractor for OEMs
and the U.S. government. The Company's Ground Support Group, which currently
accounts for approximately 30% of the Company's revenues, manufactures various
types of GSE, including ground power, air start and air conditioning units, as
well as certain electronic equipment for commercial airlines and military
agencies..

Through a combination of internal growth and acquisitions, the Company
increased revenues 35% from $25.6 million in the year ended October 31, 1995 to
$34.6 million in the year ended October 31, 1996 and earnings per share from
continuing operations 130% from $0.27 per share in the year ended October 31,
1995 to $0.62 in the year ended October 31, 1996. In addition, the Company
increased revenues and earnings per share from continuing operations from $23.0
million and $0.39 per share for the nine months ended July 31, 1996 to $44.5
million and $0.78 per share for the nine months ended July 31, 1997.

GROWTH STRATEGIES

The Company intends to capitalize on its reputation for quality, its
research and development and manufacturing capabilities, existing customer
relationships and industry trends to continue to achieve profitable growth in a
number of niche aerospace markets. Specific components of the Company's growth
strategy include the following:

EXPANSION OF JET ENGINE REPLACEMENT PARTS PRODUCT LINES. The Company
intends to substantially broaden its current jet engine replacement parts
product lines through the development and receipt of additional PMAs from the
FAA. The PMA approval process requires sophisticated computer aided design
technologies, advanced engineering and manufacturing capabilities, and depends
to a significant extent on the Company's established credibility with the FAA.
The Company believes that the PMA approval process creates a significant
barrier to entry as a result of both its technical demands and its limits on
the rate at which competitors can bring products to market.

EXPANSION OF GSE PRODUCT LINES. The Company expects that the planned
expansion of its Ground Support Group's manufacturing facility will permit the
Company to expand its GSE product lines. The Company believes that continued
expansion of its GSE product lines, in combination with its expanding jet
engine product lines and component overhaul capabilities, will provide
increased cross selling and marketing opportunities that will enable the
Company to capitalize on its reputation for quality products and the aviation
industry's trends toward outsourcing and vendor consolidation.

FORM STRATEGIC ALLIANCES. The Company seeks to form strategic alliances
that will allow it to accelerate the development of additional PMAs and provide
airlines with an alternative to the increased costs and occasional availability
and delivery problems many airlines have experienced related to OEM sale source
replacement parts. Pursuant to this objective, in October 1997 the Company
formed a strategic alliance between its Flight Support Group and Lufthansa.
Lufthansa is the world's largest independent provider of engineering and
maintenance services for aircraft and aircraft engines supporting over 200
airlines, governments andother customers on a worldwide basis. The objective of
this Lufthansa strategic alliance is to (i) offer a broadened line of
FAA-approved jet engine replacement parts to the entire jet engine maintenance
market; (ii) offer airlines and airmotives a more responsive and cost effective
alternative to OEMs, and (iii) capitalize on Lufthansa's established industry
and customer relationships.

23

PURSUE ACQUISITIONS OF COMPLEMENTARY BUSINESSES. A key element of the
Company's strategy involves growth through acquisitions of other companies,
assets or product lines that complement or expand the Company's existing Flight
Support Group and Ground Support Group businesses. The Company believes that
acquisitions will enable it to capitalize on its fixed costs of operations and
further expand the aerospace products and services which it can offer to its
worldwide customer base. Accordingly, the Company intends to pursue an
aggressive acquisition strategy to gain market share in certain segments of the
fragmented aviation service and supply industry. The Company's acquisition of
Trilectron in September 1996 and Northwings in September 1997 exemplify the
consolidation opportunities that the Company believes are available. The
Company is continually evaluating acquisition opportunities that meet the
Company's criteria of a similar customer base, proprietary technologies and the
opportunity for consolidation. However, the Company has no current agreements
with respect to any acquisition and no assurance can be given that any of the
acquisitions currently being considered will be consummated.

FLIGHT SUPPORT GROUP

The Company's Flight Support Group designs, engineers, manufactures,
repairs and/or overhauls jet engine and airframe parts and components such as
combustion chambers, gas flow transition ducts and various other engine and
airframe parts. The Company also manufactures specialty aviation and defense
components as a subcontractor. The Company serves a broad spectrum of the
aviation industry, including (i) commercial airlines, (ii) air cargo carriers,
(iii) OEMs, (iv) repair and overhaul facilities, and (v) the U.S. government.

JET ENGINE REPLACEMENT PARTS. Aircraft spare parts conditions are
classified within the industry as (i) factory new, (ii) new surplus, (iii)
overhauled, (iv) serviceable, and (v) as removed. A factory new or new surplus
part is one that has never been installed or used. Factory new parts are
purchased from manufacturers (both OEMs and independents such as the Company)
or their authorized distributors. New surplus parts are purchased from excess
stock of airlines, repair facilities or other redistributors. An overhauled
part has been completely repaired and inspected by a licensed repair facility
(such as the Company's). An aircraft spare part is classified repairable if it
can be repaired by a licensed repair facility under applicable regulations. A
part may be classified serviceable if it is removed by the operator from an
aircraft or engine while operating under an approved maintenance program and is
airworthy and meets any manufacturer or time and cycle restrictions applicable
to the part. A factory new, new surplus, overhauled or serviceable part
designation indicates that the part can be immediately utilized on an aircraft.
A part in "as removed" condition requires inspection and possibly functional
testing, repair or overhaul by a licensed facility prior to being returned to
service in an aircraft.

FACTORY-NEW JET ENGINE REPLACEMENT PARTS. The Company's principal business
is the research and development, design, manufacture and sale of FAA-approved
jet engine replacement parts that are sold to domestic and foreign commercial
air carriers and aircraft repair and overhaul companies. The Company's
principal competitor is Pratt & Whitney, a division of UTC. The Flight Support
Group's factory new jet engine replacement parts include combustion chambers,
gas flow transition ducts and various other jet engine replacement parts. A key
element of the Company's growth strategy is the continued design and
development of an increasing number of PMA replacement parts in order to
further penetrate its existing customer base and obtain new customers. The
Company selects the jet engine replacement parts to design and manufacture
through a selection process in which the Company analyzes industry information
to determine which jet engine replacement parts are expected to generate the
greatest profitability. As part of Lufthansa's investment in the Flight Support
Group, Lufthansa will have the right to select 50% of the engine parts for
which the Company will seek PMAs, provided that such parts are technologically
and economically feasible and substantially comparable with the profitablility
of the Company's other PMAs.

24

The following table sets forth (i) the lines of engines for which the
Company provides jet engine replacement parts and (ii) the approximate number
of such engines currently in service as estimated by the Company. Although the
Company expects that its strategic alliance with Lufthansa will broaden the
Company's product lines, virtually all of the Company's current PMA parts are
for Pratt & Whitney engines, with a substantial majority for the JT8D. See
"Risk Factors--Dependence on JT8D Aircraft Engine Aftermarket."

REPAIR AND OVERHAUL SERVICES. The Company provides jet engine replacement
parts repair and overhaul services for the Pratt & Whitney JT8D, JT3D, JT9D,
PW2000 and PW4000 and the CFM International CFM56 engines. The Company's repair
and overhaul operations require a high level of expertise, advanced technology
and sophisticated equipment. The repair and overhaul services offered by the
Company include the repair, refurbishment and overhaul of numerous accessories
and parts mounted on gas turbine engines, aircraft wings and frames or
fuselages. Engine accessories include fuel pumps, generators and fuel controls.
Parts include pneumatic valves, starters and actuators, turbo compressors and
constant speed drives, hydraulic pumps, valves and actuators,
electro-mechanical equipment and auxiliary power unit accessories.

The Company continually evaluates new engine lines, models and derivatives
to determine whether the potential demand for overhaul services justifies the
expenditures required for inventory and modifications to tooling and equipment.
The Company believes that its September 1997 acquisition of Northwings will
provide the Company with a well-established platform for additional growth in
the repair and overhaul sector of the aviation industry.

MANUFACTURE OF SPECIALTY AIRCRAFT/DEFENSE RELATED PARTS. The Company also
derives revenue from the sale of specialty components as a subcontractor for
OEMs and the U.S. government.

GROUND SUPPORT GROUP

The Company currently serves the commercial and military GSE markets
through its manufacture of ground power units, air start units and air
conditioning units that are sold to both domestic and foreign commercial and
military customers. The Company's Ground Support Group also manufactures
specialty military electronics such as shipboard power supplies and power
converters. Because military and commercial aircraft vary so widely by size and
manufacturer, unique equipment is often required for each distinct air frame.
Military aircraft frequently require unique equipment arrangements that
necessitate custom manufacturing. Examples of the Company's GSE products
include a sophisticated cooling system for the Air Force's new F-22 fighter
aircraft and a combination ground power and air conditioning unit for the F-16
aircraft.

fabrication, vacuum heat treating, plasma spraying and laser cutting. The
Company also performs all of the design and engineering for its products.
Specific components of the Company's manufacturing process include:

RESEARCH AND DEVELOPMENT. The Company's research and development
department uses state-of-the-art equipment such as a scanning electron
microscope, CAD/CAM/CAE workstations and finite element analysis and thermal
testing software to design and engineer components, as well as to ensure
accurate data transfer between the Company's new product development and
manufacturing departments. The Company's engineers, recruited from OEMs and
other aerospace industry participants, specialize in a variety of disciplines,
including aerodynamics, heat transfer, manufacturing, materials and structures.
See "--FAA Approvals and Product Design."

SPECIAL PROCESSES. The Company believes that its heat treatment, brazing,
plasma spraying and other in-house special process capabilities reduce lead
times and allow the Company to better control the quality of its products. For
example, the Company's robotic systems can apply thermal barrier and wear
resistant coatings to parts ranging from 0.25" to 60".

QUALITY CONTROL. The Company incurs significant expenses to maintain
stringent quality control of its products and services. In addition to domestic
and foreign governmental regulations, OEMs, commercial airlines and other
customers require that the Company satisfy certain requirements relating to the
quality of its products and services. The Company performs testing and
certification procedures on all of the products that it designs, engineers,
manufactures, repairs and overhauls, and maintains detailed records to ensure
traceability of the production of and service on each aircraft component.
Management believes that the expense required to institute and maintain the
Company's quality control procedures represents a barrier to entry by
competitors.

FAA APPROVALS AND PRODUCT DESIGN

Non-OEM manufacturers of jet engine replacement parts must receive a PMA
from the FAA. The PMA process includes the submission of sample parts, drawings
and testing data to one of the FAA's Aircraft Certification Offices ("ACOs"),
where the submitted materials are analyzed. The Company believes that an
applicant's ability to successfully complete the PMA process is limited by
several factors, including (i) the agency's confidence level in the applicant,
(ii) the complexity of the part, (iii) the volume of PMAs being filed, and (iv)
the resources available to the FAA. The Company also believes that companies
such as the Company that have demonstrated their manufacturing capabilities and
established a track record with the FAA generally receive a faster turnaround
time in the processing of PMA applications. Finally, the Company believes that
the PMA process creates a significant barrier to entry in this market niche as
a result of both its technical demands and its limits on the rate at which
competitors can bring products to market.

As part of its growth strategy, the Company has continued to increase its
research and development activities. Research and development expenditures
increased from approximately $300,000 in fiscal 1991 to $3.1 million in fiscal
1997 and are expected to total over $6 million in fiscal 1998. Moreover, the
Company's new strategic alliance with Lufthansa will provide the Flight Support
Group with $16 million for research and development projects relating to jet
engine replacement parts. The Company believes that the Flight Support Group's
research and development capabilities are a significant component of its
historical success and an integral part of its growth strategy.

The Company benefits from its proprietary rights relating to certain
designs, engineering, manufacturing processes and repair and overhaul
procedures. Customers often rely on the Company to

26

provide initial and additional components, as well as to redesign, reengineer,
replace or repair and provide overhaul services on such aircraft components at
every stage of their useful lives. In addition, for certain products, the
Company's unique manufacturing capabilities are required by the customer's
specifications or designs, thereby necessitating reliance on the Company for
production of such designed products.

While the Company has developed proprietary techniques, software and
manufacturing expertise for the manufacture of jet replacement parts, the
Company has no patents for these proprietary techniques and chooses to rely on
trade secret protection. The Company believes that although its proprietary
techniques, software and manufacturing expertise are subject to
misappropriation or obsolescence, development of improved methods and processes
and new techniques by the Company will continue on an ongoing basis as dictated
by the technological needs of the Company's business. See "Risk
Factors--Technological Developments."

SALES, MARKETING AND CUSTOMERS

Each of the Company's operating divisions and subsidiaries independently
conducts sales and marketing efforts directed at their respective customers and
industries and, in some cases, collaborate with other operating divisions and
subsidiaries for cross-marketing efforts. Sales and marketing efforts are
conducted primarily by in-house sales personnel, and to a lesser extent by
independent manufacturer's representatives. Generally, in-house sales personnel
receive a base salary plus incentive compensation and manufacturer's
representatives receive a commission on sales.

The Company believes that direct relationships are crucial to establishing
and maintaining a strong customer base and, accordingly, the Company's senior
management team is actively involved in the Company's marketing activities,
particularly with established customers. The Company is also a member of
various trade and business organizations related to the commercial aviation
industry. For example, the Company is one of the smallest independent companies
in the Aerospace Industries Association ("AIA"), the leading trade association
representing the nation's manufacturers of commercial, military and business
aircraft, aircraft engines and related components and equipment. Due in large
part to its established industry presence, the Company believes that it
benefits from strong customer relations, name recognition and repeat business.

The Company sells its products to a broad customer base consisting of
domestic and foreign commercial and cargo airlines, repair and overhaul
facilities, other aftermarket suppliers of aircraft engine and airframe
materials, OEMs and military units. No one customer accounted for sales of 10%
or more of total consolidated sales from continuing operations during any of
the last three fiscal years. However, the Company's net sales to its five
largest customers accounted for approximately 20% of total net sales during the
year ended October 31, 1996. See "Risk Factors--Customer Concentration."

COMPETITION

The aerospace product and service industry is characterized by intense
competition and certain competitors of the Company have substantially greater
name recognition, inventories, complementary product and service offerings,
financial, marketing and other resources than the Company. As a result, such
competitors may be able to respond more quickly to customer requirements than
the Company. Moreover, smaller competitors may be in a position to offer more
attractive pricing of engine parts as a result of lower labor costs and other
factors. Any expansion of the Company's existing products or services could
expose the Company to new competition. See "Risk Factors--Competition."

The Company's jet engine replacement parts business competes primarily
with Pratt & Whitney, a division of United Technologies Corporation. The
competition is principally based on price and service inasmuch as the Company's
parts are interchangeable with the parts produced by Pratt & Whitney. The
Company believes that it supplies over 50% of the market for certain JT8D
engine parts for which it holds a PMA from the FAA, with Pratt & Whitney
controlling the balance. With respect to other

27

aerospace products and services sold by the Flight Support Group, the Company
competes with both the leading jet engine OEMs and a large number of machining,
fabrication and repair companies, some of which have greater financial and
other resources than the Company. Competition is based mainly on price, product
performance, service and technical capability.

Competition for the repair and overhaul of jet engine components comes
from three primary sources, some with greater financial and other resources
than the Company: OEMs, major commercial airlines and other independent service
companies. Certain major commercial airlines own and operate their own service
centers. Some major airlines have begun to sell their repair and overhaul
services to other aircraft operators. The repair and overhaul services provided
by domestic airlines are primarily for their own components, although these
airlines may outsource a limited amount of repair and overhaul services to
third parties. Foreign airlines that provide repair and overhaul services
typically provide these services for their own components and for third
parties. OEMs also maintain service centers that provide repair and overhaul
services for the components they manufacture. Other independent service
organizations also compete for the repair and overhaul business of other users
of aircraft components. The Company believes that the principal competitive
factors in the airmotive market are quality, turnaround time, overall customer
service and price.

The Company's Ground Support Group competes with several large and small
domestic and foreign competitors, some of which have greater financial
resources than the Company. The Company believes the market for its GSE is
highly fragmented, with competition based mainly on price, product performance
and service.

RAW MATERIALS

The Company purchases a variety of raw materials, primarily consisting of
high temperature alloy sheet metal and castings and forgings from various
vendors. The Company also purchases parts, including diesel and gas powered
engines, compressors and generators. The materials used by the Company's
operations are generally available from a number of sources and in sufficient
quantities to meet current requirements subject to normal lead times.

GOVERNMENT REGULATION

FAA. The FAA regulates the manufacture, repair and operation of all
aircraft and aircraft parts operated in the United States. Its regulations are
designed to ensure that all aircraft and aviation equipment are continuously
maintained in proper condition to ensure safe operation of the aircraft.
Similar rules apply in other countries. All aircraft must be maintained under a
continuous condition monitoring program and must periodically undergo thorough
inspection and maintenance. The inspection, maintenance and repair procedures
for the various types of aircraft and equipment are prescribed by regulatory
authorities and can be performed only by certified repair facilities utilizing
certified technicians. Certification and conformance is required prior to
installation of a part on an aircraft. Aircraft operators must maintain logs
concerning the utilization and condition of aircraft engines, life-limited
engine parts and airframes. In addition, the FAA requires that various
maintenance routines be performed on aircraft engines, certain engine parts and
airframes at regular intervals based on cycles or flight time. Engine
maintenance must also be performed upon the occurrence of certain events, such
as foreign object damage in an aircraft engine or the replacement of
life-limited engine parts. Such maintenance usually requires that an aircraft
engine be taken out of service. The operations of the Company may in the future
be subject to new and more stringent regulatory requirements. In that regard,
the Company closely monitors the FAA and industry trade groups in an attempt to
understand how possible future regulations might impact the Company. See "Risk
Factors--Government Regulation."

Because the Company's jet engine replacement parts largely consist of
older model JT8D aircraft engines and engine parts, the FAA's noise regulations
also have a substantial impact upon the Company. The ability of aircraft
operators to utilize such JT8D aircraft engines in domestic flight operations
is

28

significantly influenced by regulations promulgated by the FAA governing, among
other things, noise emission standards. Pursuant to the Aircraft Noise and
Capacity Act, the FAA has required all aircraft operating in the United States
with a maximum weight of more than 75,000 pounds to meet Stage 2 noise
restriction levels. The FAA has mandated that all such Stage 2 aircraft (such
as the non-hush-kitted Boeing 727-200s, Boeing 737-200s and McDonnell Douglas
DC-9-30/40/50s) must be phased out of operation in the contiguous United States
by December 31, 1999. This ban on operation in the United States of
non-hush-kitted Stage 2 aircraft applies to both domestic and foreign aircraft
operators. The European Union has adopted similar restrictions for the
operation of Stage 2 aircraft within member nations of the European Union
subject to a variety of exemptions. Various communities surrounding the larger
European cities also have adopted more stringent local regulations which
restrict the operation of hush-kitted aircraft in such jurisdictions. See "Risk
Factors--Dependence on the JT8D Aircraft Engine Aftermarket."

ENVIRONMENTAL. The Company's operations are subject to extensive, and
frequently changing, federal, state and local environmental laws and
substantial related regulation by government agencies, including the EPA. Among
other matters, these regulatory authorities impose requirements that regulate
the operation, handling, transportation, and disposal of hazardous materials,
and require the Company to obtain and maintain licenses and permits in
connection with its operations This extensive regulatory framework imposes
significant compliance burdens and risks on the Company. Notwithstanding these
burdens, the Company believes that it is in material compliance with all
federal, state and local environmental laws and regulations governing its
operations.

The principal environmental laws to which the Company is subject include
the Clean Air Act of 1970 (the "CAA"), as amended in 1990; the Clean Water Act
of 1977; the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"); the Resource Conservation Recovery Act of 1976 (the
"RCRA"); and the Hazardous and Solid Waste Amendments of 1984 ("HSWA"). The
following is a summary of the material regulations that are applicable to the
Company:

The CAA imposes significant requirements upon owners and operators of
facilities that discharge air pollutants into the environment. The CAA mandates
that facilities which emit air pollutants comply with certain operational
criteria and secure appropriate permits. Additionally, authorized states such
as Florida may implement various aspects of the CAA and develop their own
regulations for air pollution control. The Company's facilities presently hold
or have applied for air emission permits and the Company intends to conduct an
air emissions inventory and health and safety audit of its facilities and,
depending upon the results of such assessments, may find it necessary to secure
additional permits and/or to install additional control technology, which could
result in the initiation of an enforcement action, the imposition of penalties
and the possibility of substantial capital expenditures.

CERCLA, as amended by the Superfund Amendments and Reauthorization Act of
1986 ("SARA"), is designed to respond to the release of hazardous substances.
CERCLA's most notable objectives are to provide criteria and funding for the
cleanup of sites contaminated by hazardous substances and impose strict
liability on parties responsible for such contamination namely, owners and
operators of facilities or vessels from which such releases or threatened
releases occur, and persons who generated, transported, or arranged for the
transportation of hazardous substances to a facility from which such release or
threatened release occurs.

RCRA and EPA's implementing regulations establish the basic framework for
federal regulation of hazardous waste. RCRA governs the generation,
transportation, treatment, storage and disposal of hazardous waste through a
comprehensive system of hazardous waste management techniques and requirements.
RCRA requires facilities such as the Company's that treat, store, or dispose of
hazardous waste to comply with enumerated operating standards. Many states,
including Florida, have created programs similar to RCRA for the purpose of
issuing annual operating permits and conducting routine inspections of such
facilities to ensure regulatory compliance. The Company believes that its
facilities are in material compliance with all currently applicable RCRA and
similar state requirements, hold or

29

have applied for all applicable permits required under RCRA and similar state
laws, and are operating in material compliance with the terms of all such
permits.

In addition, Congress has enacted federal regulations governing the
underground storage of petroleum products and hazardous substances. The federal
underground storage tank ("UST") regulatory scheme mandates that EPA establish
requirements for leak detection, construction standards for new USTs, reporting
of releases, corrective actions, on-site practices and record-keeping, closure
standards, and financial responsibility. Some states, including Florida, have
promulgated their own performance criteria for new USTs, including requirements
for spill and overfill protection, UST location, as well as primary and
secondary containment. The Company believes that its facilities are in material
compliance with the federal and state UST regulatory requirements and
performance criteria.

OTHER. The Company is also subject to a variety of other regulations,
including worker-related and community safety laws. The Occupational Safety and
Health Act of 1970 ("OSHA") mandates general requirements for safe workplaces
for all employees. In particular, OSHA provides special procedures and measures
for the handling of certain hazardous and toxic substances. In addition,
specific safety standards have been promulgated for workplaces engaged in the
treatment, disposal or storage of hazardous waste. Requirements under state
law, in some circumstances, may mandate additional measures for facilities
handling materials specified as extremely dangerous. Although the Company
believes that its operations are in material compliance with OSHA's health and
safety requirements, the Company anticipates upgrading its facilities at a cost
that may exceed $100,000.

(1) The Company has acquired 18.5 acres of land in Palmetto, Florida on which
it plans to develop a new 75,000 square foot Ground Support Group
manufacturing facility and office. The Company expects to commence
construction in first quarter of fiscal 1998 and complete the facility by
July 1998.
(2) The Company is currently in the process of negotiating a lease or purchase
agreement for a new overhaul and repair facility.

The Company's current monthly rental expense is approximately $29,000. For
additional information with respect to the Company's leases, see Note 6 of
Notes to the Company's Audited Consolidated Financial Statements. Including the
presently planned additional facilities described above, the Company believes
that it has adequate capacity to handle its anticipated needs for the
foreseeable future.

INSURANCE

The Company is a named insured under policies which include the following
coverage: (i) products liability, including grounding, up to $200 million
(combined annual aggregate bodily injury and property damage); (ii) blanket
real and personal property and business interruption up to approximately $70
million; (iii) general liability coverage up to $2 million ($1,000,000 limit
for each claim); (iv) employment practices liability up to $1 million for each
claim and in the aggregate; (v) international liability and automobile
liability up to $1 million and employer's liability up to $500,000; (vi)
umbrella liability coverage up to $20 million for each occurrence and in the
aggregate; and (vii) various other activities or items subject to certain
limits and deductibles. The Company believes that these coverages are adequate
to insure against the various liability risks of its business. See "Risk
Factors--Product Liability; Claims Exposure."

30

EMPLOYEES

As of October 31, 1997, the Company and its subsidiaries had approximately
480 full-time employees, of which approximately 330 were in the Flight Support
Group, 140 were in the Ground Support Group, and approximately 10 were in
corporate. None of the Company's employees are represented by a union. The
Company believes that it has excellent relations with its employees.

LEGAL PROCEEDINGS

In November 1989, United Technologies Corporation ("UTC") filed a suit
against two of the Company's subsidiaries in its Flight Support Group in the
United States District Court for the Southern District of Florida. The
complaint, as amended in fiscal 1995, alleged infringement of a patent,
misappropriation of trade secrets and unfair competition relating to certain
jet engine parts and coatings sold by a subsidiary in the Flight Support Group
in competition with Pratt & Whitney, a division of UTC. UTC sought
approximately $10 million in damages for the patent infringement and
approximately $30 million in damages for the misappropriation of trade secrets
and the unfair competition claims. The aggregate damages referred to in the
preceding sentence do not exceed approximately $30 million because a portion of
the misappropriation and unfair competition damages duplicate the $10 million
patent infringement damages. The complaint also sought, among other things,
pre-judgment interest and treble damages.

In July and November 1995, the Company filed its answers to UTC's
complaint denying the allegations. In addition, the Company filed counterclaims
against UTC for, among other things, malicious prosecution, trade
disparagement, tortious interference, unfair competition and antitrust
violations. The Company is seeking treble, compensatory and punitive damages in
amounts to be determined at trial.

In August 1997, a Motion for Summary Judgment filed by the Company on a
portion of the lawsuit was granted by the United States District Court Judge.
The Summary Judgment dismissed UTC's claims for misappropriation of trade
secrets and unfair competition, finding that Florida's statute of limitations
bars such claims. The ruling left pending UTC's claim alleging infringement of
a patent that expired in 1992 and the Company's counterclaims against UTC
alleging, among other things, malicious prosecution, trade disparagement,
tortious interference, unfair competition and antitrust violations. In
September 1997, UTC served its Motion for Reconsideration of the Court's Motion
for Summary Judgment, which is currently pending, and accordingly, the Company
filed its response opposing such motion.

Based on currently known facts, the Company's legal counsel has advised
that it believes that the Company should be able to successfully defend the
patent infringement claims alleged in UTC's complaint. With respect to the
misappropriation and unfair competition claims, legal counsel to the Company
has advised that it believes the likelihood of success of UTC's Motion for
Reconsideration is remote. Further, the Company intends to vigorously pursue
its counterclaims against UTC. The ultimate outcome of this litigation is not
certain at this time and no provision for gain or loss, if any, has been made
in the consolidated financial statements included elsewhere in this Prospectus.
Although the Company and its legal counsel believe that the Company will be
successful in the above matters, there can be no certainty that the UTC
litigation will not have a material adverse effect on the Company. See "Risk
Factors--Litigation."

The Company is from time to time involved in other routine litigation
related to its business, none of which is expected to have a material adverse
effect on the Company.

MR. LAURANS A. MENDELSON has served as Chairman of the Board of the
Company since December 1990 and as Co-Chairman of the Board of the Company from
January 1990 until December 1990. Mr. Mendelson has also served as Chief
Executive Officer of the Company since February 1990, President of the Company
since September 1991 and served as President of MediTek Health Corporation from
May 1994 until its sale in July 1996. Mr. Mendelson has served as Chairman of
the Board of U.S. Diagnostic Inc. since February 1997. Mr. Mendelson also
serves on the Board of Governors of the Aerospace Industries Association
("AIA"). Mr. Mendelson has been Chairman of the Board of Ambassador Square,
Inc. (a Miami, Florida real estate development and management company) since
1980 and President of that company since 1988. He has been Chairman of Columbia
Ventures, Inc. (a private investment company) since 1985 and President of that
company since 1988. Mr. Mendelson is a Certified Public Accountant. Mr.
Mendelson is also a trustee of Columbia University, New York, New York a
trustee of Mount Sinai Medical Center, Miami Beach, Florida and Chairman of the
Hollywood Economic Growth Corporation, Hollywood, Florida. Mr. Mendelson holds
an AB degree from Columbia College of Columbia University and an MBA degree
from the Columbia University Graduate School of Business.

MR. THOMAS S. IRWIN has served as Executive Vice President and Chief
Financial Officer of the Company since September 1991 and served as Senior Vice
President of the Company from 1986 to 1991 and Vice President and Treasurer
from 1982 to 1986. Mr. Irwin is a Certified Public Accountant. Mr. Irwin holds
a BBA degree from Wake Forest University.

MR. ERIC A. MENDELSON has served as a Vice President of the Company since
March 1992 and President of the Flight Support Group since April 1993. Mr.
Mendelson served as Director of Planning and Operations of the Company and
Executive Vice President of the Flight Support Group from 1990 to March 1992.
Mr. Mendelson holds an AB degree from Columbia College of Columbia University
and an MBA degree from the Columbia University Graduate School of Business. Mr.
Mendelson served on the Product Certification and Parts Manufacturing Working
Groups of the Aviation Rulemaking Advisory Committee of the FAA and the Civil
Aviation Council of the AIA. Eric Mendelson is the son of Laurans Mendelson and
the brother of Victor Mendelson.

MR. VICTOR H. MENDELSON has served as President of the Ground Support
Group since September 1996 and as General Counsel of the Company since 1993.
Mr. Mendelson served as Executive Vice President of MediTek Health Corporation
beginning in 1994 and its Chief Operating Officer from 1995

32

until its sale in July 1996. Mr. Mendelson served as the Company's Associate
General Counsel from 1992 until 1993. From 1990 until 1992, he served on a
consulting basis with the Company developing and analyzing various strategic
opportunities. Mr. Mendelson is a member of the American Bar Association and
The Florida Bar. Mr. Mendelson is a trustee of St. Thomas University, Miami,
FL. Mr. Mendelson holds an AB degree from Columbia College of Columbia
University and a JD from the University of Miami School of Law. Mr. Mendelson
is a member of the Legal and Legislative Committee of the AIA. Victor Mendelson
is the son of Laurans Mendelson and the brother of Eric Mendelson.

MR. JAMES L. REUM, Chief Operating Officer of the Company's Flight Support
Group since May 1995, has held various executive positions in the Company since
January 1990. From 1986 to 1989, Mr. Reum was self-employed as a management and
engineering consultant to companies primarily within the aerospace industry.
From 1957 to 1986, he was employed in various management positions with
Chromalloy Gas Turbine Corp., Cooper Airmotive (later named Aviall, Inc.),
United Airlines, Inc. and General Electric Company. Mr. Reum is a member of the
Product Certification and Parts Manufacturing Working Groups of the Aviation
Rulemaking Advisory Committee of the FAA and the Civil Aviation Counsel of the
AIA.

MR. JACOB T. CARWILE retired as a Lt. Col. from the United States Air
Force ("USAF"), and presently serves as an aerospace consultant. During Mr.
Carwile's USAF career, Mr. Carwile served as a command pilot and procurement
officer, working extensively in the development, testing, and production of
many aircraft, helicopters, and engines. Mr. Carwile also served in special
management positions with numerous overhaul and modification facilities in the
United States and Spain. From 1972 to 1987 Mr. Carwile served as president of
Decar Associates, which provided aviation material to the U.S. government and
the aerospace industry.

MR. SAMUEL L. HIGGINBOTTOM is a retired executive officer of Rolls Royce,
Inc. (an aircraft engine manufacturer), where he served as Chairman, President
and Chief Executive Officer from 1974 to 1986. He was the Chairman of the
Columbia University Board of Trustees from 1982 until September 1989. Mr.
Higginbottom was President, Chief Operating Officer and a director of Eastern
Airlines, Inc., from 1970 to 1973 and served in various other executive
capacities with that company from 1964 to 1969. Mr. Higginbottom is a director
of British Aerospace Holdings, Inc., an aircraft manufacturer, and was a
director of AmeriFirst Bank from 1986 to 1991. He is also Vice Chairman of St.
Thomas University, Miami, Florida.

MR. PAUL F. MANIERI is a management consultant and retired executive of
IBM Corporation, for which he served in various positions for 44 years,
including Director of Manufacturing and Engineering for IBM World Trade
Corporation and Director of Personnel and Director of Communications for IBM
Corporation.

MR. ALBERT MORRISON, JR. has served as President of Morrison, Brown, Argiz
& Company, a certified public accounting firm located in Miami, Florida, since
1971. Mr. Morrison has served as the Vice Chairman of the Dade County
Industrial Development Authority since 1983. Mr. Morrison is the Treasurer of
the Florida International University Board of Trustees and has served as a
Trustee since 1980. Mr. Morrison also served as a director of Logic Devices,
Inc., a computer electronics company and Walnut Financial Services, Inc., a
financial services company.

DR. ALAN SCHRIESHEIM is retired from the Argonne National Laboratory,
where he served as Director from 1984 to 1996. From 1983 to 1984, he served as
Senior Deputy Director and Chief Operating Officer of Argonne. From 1956 to
1983, Dr. Schriesheim served in a number of capacities with Exxon Corporation
in research and administration, including positions as General Manager of the
Engineering Technology Department for Exxon Research and Engineering Co. and
Director of Exxon's Corporate Research Laboratories. Dr. Schriesheim is also a
director of Rohm and Haas Company, a chemical company, and a member of the
Board of the Children's Memorial Hospital of Chicago, Illinois.

MR. GUY C. SHAFER is retired from Coltec Industries, Inc., formerly Colt
Industries, Inc., (a manufacturer of aviation and automotive equipment), where
he served as Advisor to the Chief Executive Officer from 1987 to 1988,
Executive Vice President from 1985 to 1986 and Group Vice President from 1969
to 1985. Mr. Shafer has been in the aviation and automotive manufacturing
industry since 1946.

33

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of July 31, 1997 by (i) each person
who is known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) the Chief Executive Officer and the other four
most highly compensated executive officers, (iii) each of the directors of the
Company, and (iv) all directors and executive officers of the Company as a
group. Except as set forth below, the shareholders named below have sole voting
and investment power with respect to all shares of Common Stock shown as being
beneficially owned by them.

(1) Unless otherwise indicated, the address of each Beneficial Owner
identified is c/o HEICO Corporation, 3000 Taft Street, Hollywood, Florida
33021. Except as otherwise indicated, such Beneficial Owners have sole
voting and investment power with respect to all shares of Common Stock
owned by them, except to the extent such power may be shared with a
spouse.

(2) The number of shares of Common Stock deemed outstanding prior to this
offering includes (i) 5,353,932 shares of Common Stock outstanding as of
July 31, 1997 and (ii) shares issued pursuant to options held by the
respective person or group which may be exercised within 60 days after
July 31, 1997 ("Presently Exercisable Stock Options") as set forth below.
Pursuant to the rules of the Securities and Exchange Commission, presently
exercisable stock options are deemed to be outstanding and to be
beneficially owned by the person or group for the purpose of computing the
percentage ownership of such person or group, but are not treated as
outstanding for the purpose of computing the percentage ownership of any
other person or group.

(4) Reflects 288,872 shares allocated to participant's individual accounts and
589,175 unallocated shares as of June 30, 1997. Under the terms of the
Plan, all shares allocated to the accounts of participating employees will
be voted or not as directed by written instructions from the participating
employees, and allocated shares for which no instructions are received and
all unallocated shares will be voted in the same proportion as the shares
for which instructions are received. The address of HEICO Savings and
Investment Plan is c/o NationsBank Trust, P. O. Box 1469, Tampa, Florida
33601.

(6) Reflects 383,775 shares of HEICO Common Stock as of December 31, 1996,
based on information in a Schedule 13G dated February 7, 1997, all of
which shares are held in portfolios of advisory clients of Dimensional,
DFA Investment Dimensions Group Inc., or DFA Investment Trust Company,
registered open-end investment companies. The address of Dimensional Fund
Advisors, Inc. is 1299 Ocean Avenue, Suite 650, Santa Monica, California
90401.

(7) Based on information in a Schedule 13D dated January 10, 1997 filed by Mr.
Plessner individually and as sole Trustee for the Rene Plessner
Associates, Inc. Profit Sharing Plan. Reflects 168,088 shares held by Mr.
Plessner and 111,891 shares held by the Rene Plessner Associates, Inc.
Profit Sharing Plan, an employee profit sharing plan of Rene Plessner
Associates, Inc., an executive search company. The address of Rene
Plessner Reporting Group is 375 Park Avenue, New York, New York 10152.

(10) Reflects 98,860 shares held by MIC, 158,194 shares covered by currently
exercisable stock options and 7,028 shares held by the HEICO Savings and
Investment Plan and allocated to Eric A. Mendelson's account. See Note (2)
above.

(11) Laurans A. Mendelson disclaims beneficial ownership with respect to 98,860
of these shares, which are held in the name of MIC, 12,500 shares which
were donated to Laurans A. and Arlene H. Mendelson Charitable Foundation,
Inc., of which Mr. Mendelson is president. The remaining 898,514 shares
are held solely by Mr. Mendelson or LAM Limited Partners and include
510,069 shares covered by currently exercisable stock options and 10,864
shares held by the HEICO Savings and Investment Plan and allocated to Mr.
Mendelson's account. See Notes (3), (9) and (11).

(12) Reflects 98,860 shares held by MIC, 158,195 shares covered by currently
exercisable stock options, of which 104,322 shares are held by the Victor
H. Mendelson Revocable Investment Trust and 4,611 shares held by the HEICO
Savings and Investment Plan and allocated to Victor H. Mendelson's
account. See Note (2) above.

(13) Albert Morrison Jr.'s voting and dispositive power with respect to 10,321
of these shares is held indirectly through Sheridan Ventures, Inc., a
corporation of which Mr. Morrison is the President, but not a shareholder.

(15) Reflects 133,280 shares covered by currently exercisable stock options and
15,779 shares held by the HEICO Savings and Investment Plan and allocated
to Thomas S. Irwin's account.

(16) Reflects 62,149 shares covered by currently exercisable stock options,
3,293 shares held for the benefit of Mr. Reum by a non-qualified deferred
compensation plan offered by the Company to selected executive officers
and 3,007 shares held by the HEICO Savings and Investment Plan and
allocated to James L. Reum's account.

(17) Reflects 1,260,724 shares covered by currently exercisable stock options.
The total for all directors and officers as a group (11 persons) also
includes 41,289 shares held by the HEICO Savings and Investment Plan and
allocated to accounts of officers pursuant to the Plan. See Note (3)
above.

(18) Reflects all shares and options held by all directors and officers (11
persons), the HEICO Savings and Investment Plan and all members of the
Mendelson Reporting Group.

35

DESCRIPTION OF NOTES

The Notes will be issued under an indenture (the "Indenture") between the
Company and , as trustee (the "Trustee"), the form of which has been
filed as an exhibit to the Registration Statement. The following are summaries
of certain terms applicable to the Notes and do not purport to be complete. The
summaries are subject to, and qualified in their entirety by reference to, the
provisions of the Indenture, including the definitions therein of certain
terms. Whenever reference is made to defined terms of the Indenture, such
defined terms are incorporated herein by reference.

GENERAL

The Notes will be unsecured general obligations of the Company,
subordinate in right of payment to certain other obligations of the Company as
described under "-Subordination," and convertible into Common Stock as
described under "--Conversion of the Notes." The Notes will be limited to $75.0
million aggregate principal amount ($86.25 million if the Underwriters'
over-allotment option is exercised in full) and will mature on , 2004 (the
"Maturity Date"). The Notes will bear interest at the rate per annum shown on
the cover page hereof from the date of original issue or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, and accrued but unpaid interest will be payable
semi-annually in arrears on and of each year, commencing ,
1998 (each, an "Interest Payment Date"), or, if any such day is not a business
day, on the next succeeding business day. Interest will be paid to Noteholders
of record ("Holders") at the close of business on and ,
respectively, immediately preceding the relevant Interest Payment Date (each, a
"Regular Record Date"). Interest will be computed on the basis of a 360-day
year of twelve 30-day months.

Principal and premium, if any, and interest will be payable, and the Notes
may be presented for conversion, registration of transfer and exchange, at the
office or agency of the Company maintained for those purposes in New York, New
York (which will be a corporate trust office designated by the Trustee), except
that, at the option of the Company, payment of interest may be made by check
mailed to the address of the Holder entitled thereto as it appears on the
Register for the Notes (the "Note Register") on the related record date.

The Notes will be issued in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any transfer or exchange of Notes, but, subject to certain
exceptions set forth in the Indenture, the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

The Indenture does not contain any restrictions on the payment of
dividends or on the repurchase of securities by the Company or any financial
covenants, nor does the Indenture require the Company to maintain any sinking
fund or other reserve for the payment of the Notes.

CONVERSION OF THE NOTES

The Notes are convertible at any time prior to the Maturity Date (subject
to earlier redemption or repurchase, as described below) into shares of Common
Stock at the Conversion Price (as defined above), subject to adjustment under
certain circumstances as described below. The right to convert Notes called for
redemption will terminate at the close of business on the first business day
prior to the date fixed for redemption, unless the Company shall default on
payment of the redemption price.

The Conversion Price is subject to adjustment as set forth in the
Indenture upon the occurrence of certain events, including: (i) the issuance of
Common Stock as a dividend or other distribution on any class of capital stock
of the Company; (ii) a subdivision or combination of outstanding shares of
Common Stock; (iii) the issuance or distribution of capital stock of the
Company or the issuance or distribution of options, rights, warrants or
convertible or exchangeable securities entitling the holder

36

thereof to subscribe for, purchase, convert into or exchange for capital stock
of the Company at less than the current market price of such capital stock on
the date of issuance or distribution, but in each case only if such issuance or
distribution is made generally to holders of Common Stock or of a class or
series of outstanding capital stock convertible into or exchangeable or
exercisable for Common Stock (provided that the issuance of capital stock upon
the exercise of such options, rights, or warrants or the conversion or exchange
of convertible or exchangeable securities will not cause an adjustment in the
Conversion Price if no such adjustment would have been required at the time
such options, rights or warrants or convertible or exchangeable securities were
issued); (iv) the dividend or other distribution to holders of Common Stock, or
of a class or series of capital stock convertible into or exchangeable or
exercisable for Common Stock, generally of evidences of indebtedness of the
Company or assets (including securities, but excluding issuances, dividends and
distributions referred to above, dividends and distributions in connection with
the liquidation, dissolution or winding up of the Company and distributions of
cash referred to below); and (v) distributions of cash (other than in
connection with the liquidation or dissolution of the Company) to holders of
Common Stock, or of a class or series of capital stock convertible into or
exchangeable or exercisable for Common Stock, generally to the extent the
amount of such cash, combined with all such cash distributions made within the
preceding 12 months with respect to which no adjustment has been made exceeds
10% of the Company's market capitalization (being the product of the current
market price of the Common Stock multiplied by the number of shares of Common
Stock then outstanding) on the record date for such distribution.

Notwithstanding the foregoing, (a) if the options, rights or warrants or
convertible or exchangeable securities described in clause (iii) of the
preceding paragraph are exercisable only upon the occurrence of certain
triggering events, then the Conversion Price will not be adjusted until such
triggering events occur and (b) if such options, rights or warrants or
convertible or exchangeable securities expire unexercised, the Conversion Price
will be readjusted to take into account only the actual number of such options,
rights or warrants or convertible or exchangeable securities which were
exercised. In addition, the provisions of the preceding paragraph will not
apply to the issuance of Common Stock or the issuance or exercise of options to
purchase Common Stock under any stock-based employee compensation plan now
existing or hereafter adopted.

No adjustment will be made to the Conversion Price until cumulative
adjustments to the Conversion Price amount to at least 1% of the Conversion
Price, as last adjusted. Except as stated above, the Conversion Price will not
be adjusted for the issuance of Common Stock or any securities convertible into
or exchangeable for Common Stock or carrying the right to purchase any of the
foregoing, or the payment of dividends on the Common Stock. The Company from
time to time may reduce the Conversion Price if the Board of Directors of the
Company has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive.

In the event of (i) any reclassification or change of the Common Stock or
(ii) a consolidation, merger or combination to which the Company is a party or
a sale or conveyance to another entity of the property and assets of the
Company as an entirety or substantially as an entirety, in each case as a
result of which holders of Common Stock will be entitled to receive stock,
other securities, other property or assets (including cash) with respect to or
in exchange for such Common Stock, each Holder will have the right thereafter
to convert such Holder's Notes into the kind and amount of shares of stock,
other securities or other property or assets which the Holder would have owned
or have been entitled to receive immediately upon such consolidation, merger,
combination, sale or conveyance had such Note been converted into Common Stock
immediately prior to the effective date of such reclassification, change,
consolidation, merger, combination, sale or conveyance. Certain of the
foregoing events may also constitute or result in a Change of Control requiring
the Company to offer to repurchase the Notes. See "--Repurchase at the Option
of Holders Upon Change of Control."

In the event of a taxable distribution to holders of Common Stock or in
certain other circumstances requiring Conversion Price adjustments, a Holder of
Notes may, in certain circumstances, be deemed to have received a distribution
subject to United States federal income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Considerations--Constructive Distributions."

37

Fractional shares of Common Stock will not be issued upon conversion. A
person otherwise entitled to a fractional share of Common Stock upon conversion
will receive cash equal to the equivalent fraction of the current market price
of a share of Common Stock on the business day prior to conversion.

Except as provided below, a Holder who surrenders a Note (or portion
thereof) between the close of business on a Regular Record Date and the next
Interest Payment Date will receive interest on such Interest Payment Date with
respect to the Note (or portion thereof) so converted through such Interest
Payment Date. If, however, such Regular Record Date is on or after , 2000,
any Note surrendered for conversion between the Regular Record Date and the
related Interest Payment Date must be accompanied by a payment equal to the
interest on such Note (or portion thereof converted) payable by the Company on
such Interest Payment Date, which payment will be returned to such Holder if
the Company defaults in the payment of such interest. Except as otherwise
provided, no payment of interest on converted Notes will be payable by the
Company on any Interest Payment Date subsequent to the date of conversion, and
no adjustment will be made upon conversion of any Note for interest accrued
thereon or dividends paid on Common Stock issued.

OPTIONAL REDEMPTION BY THE COMPANY

The Notes are not redeemable at the option of the Company prior to ,
2000. Thereafter, the Notes will be redeemable, in whole or from time to time
in part, upon not less than 30 days' nor more than 60 days' prior notice of
redemption to each Holder at such Holder's last address as it appears in the
Note Register, at the redemption prices established for the Notes, together
with accrued but unpaid interest, if any, to the date fixed for redemption. The
redemption prices for the Notes (expressed as percentages of principal amount)
are as follows:

If less than all the Notes are to be redeemed, the Trustee will select the
Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or, if the
Notes are not so listed, by lot or by such method that complies with applicable
legal requirements and that the Trustee considers fair and appropriate. The
Trustee may select for redemption portions of the principal amount of Notes
that have a denomination larger than $1,000. Notes and portions thereof will be
redeemed in the amount of $1,000 or integral multiples of $1,000. The Trustee
will make the selection from Notes outstanding and not previously called for
redemption.

REPURCHASE AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL

If a Change of Control occurs, the Company will offer to repurchase each
Holder's Notes pursuant to an offer (the "Change of Control Offer") at a
purchase price equal to 100% of the principal amount of such Holder's Notes,
plus accrued but unpaid interest, if any, to the date of purchase.

A "Change of Control" means the occurrence of any of the following events
after the date of the Indenture: (i) any person or group (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) becomes the direct or indirect beneficial owner of shares of
capital stock of the Company representing greater than 50% of the combined
voting power of all outstanding shares of capital stock of the Company entitled
to vote in the election of directors under ordinary circumstances; (ii) subject
to certain exceptions, the Company consolidates with or merges into any other
entity and the outstanding Common Stock is changed or exchanged as a result;
(iii) the Company conveys, transfers or leases all or substantially all of its
assets to any other entity; (iv) at any time Continuing Directors do not
constitute a majority of the Board of Directors of

38

the Company; or (v) on any day (a "Calculation Date") the Company makes any
distribution or distributions of cash, property or securities (other than
regular quarterly dividends, Common Stock, preferred stock which is
substantially equivalent to Common Stock or rights to acquire Common Stock or
preferred stock which is substantially equivalent to Common Stock) to holders
of Common Stock, or the Company or any of its subsidiaries purchases or
otherwise acquires Common Stock, and the sum of the fair market value of such
distribution or purchase on the Calculation Date, plus the fair market value,
when made of all other such distributions and purchases which have occurred
during the 12 month period ending on the Calculation Date, in each case
expressed as a percentage of the aggregate market price of all of the shares of
Common Stock outstanding at the close of business on the last day prior to the
date of each such distribution or purchase, exceeds 50%. "Continuing Director"
means at any date a member of the Company's Board of Directors (i) who is a
member of such Board on the date of the Indenture or (ii) who was nominated or
elected by at least two-thirds of the directors who were Continuing Directors
at the time of such nomination or election or whose election to the Company's
Board of Directors was recommended or endorsed by at least two-thirds of the
directors who were Continuing Directors at the time of such election. Under
this definition, if the present Board of Directors of the Company were to
approve a new director or directors and then resign, no Change of Control would
occur even though the present Board of Directors would thereafter cease to be
in office.

Within 30 days after any Change of Control, unless the Company has
previously given a notice of optional redemption by the Company of all of the
Notes, the Company will give a notice of the Change of Control Offer to each
Holder at such Holder's last address as it appears on the Note Register which
will include: (i) a statement that a Change of Control has occurred and that
the Company is offering to repurchase all of such Holder's Notes; (ii) a brief
description of such Change of Control; (iii) the repurchase price (the "Change
of Control Payment"); (iv) the expiration date of the Change of Control Offer,
which must be no earlier than 30 days nor later than 60 days from the date such
notice is given; (v) the date such purchase will be effected, which must be no
later than 30 days after the expiration date of the Change of Control Offer;
(vi) a statement that unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Payment
Date; (vii) the Conversion Price; (viii) the name and address of the paying
agent and conversion agent; (ix) a statement that Notes must be surrendered to
the paying agent to collect the Change of Control Payment; and (x) any other
information required by applicable law and any other procedures that a Holder
must follow in order to have such Notes repurchased.

In the event the Company is required to make a Change of Control Offer,
the Company will comply with any applicable securities laws and regulations,
including, to the extent applicable, Section 14(e) of, and Rule 14e-1 and any
other tender offer rules under, the Exchange Act which may then be applicable
in connection with any offer by the Company to purchase Notes at the option of
Holders.

The Company, could, in the future, enter into certain transactions,
including certain recapitalizations of the Company, that would not constitute a
Change of Control, but that would increase the amount of Senior Indebtedness
(or any other indebtedness) outstanding at such time. The incurrence of
significant amounts of additional indebtedness could have an adverse effect on
the Company's ability to service its indebtedness, including the Notes. If a
Change of Control were to occur, there can be no assurance that the Company
would have sufficient funds at the time of such event to pay the Change of
Control Payment for all Notes tendered by Holders.

Certain of the Company's existing and future agreements relating to its
indebtedness could prohibit the purchase by the Company of the Notes pursuant
to the tender by Holders pursuant to a Change of Control Offer. Depending on
the financial circumstances of the Company, such purchase by the Company could
cause a breach of certain covenants contained in such agreements. A default by
the Company on its obligation to pay the Change of Control Payment could,
pursuant to cross-default provisions, result in acceleration of the payment of
other indebtedness of the Company outstanding at that time. See
"--Subordination."

39

SUBORDINATION

The payment of principal of and premium, if any, and interest on the Notes
will be, to the extent set forth in the Indenture, subordinated in right of
payment to the prior payment in full of all Senior Indebtedness (as defined).
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors or marshalling of assets, whether voluntary, involuntary or in
receivership, bankruptcy, insolvency or similar proceedings, the holders of all
Senior Indebtedness will first be entitled to receive payment in full of all
amounts due or to become due thereon before Holders will be entitled to receive
any payment on account of principal of and premium, if any, and interest on the
Notes or on account of any other monetary claims under or with respect to the
Notes, and before the Company may acquire any Notes for cash, property, assets
or securities. No payments on account of principal of and premium, if any, and
interest on the Notes may be made if at the time thereof: (i) there exists a
default in the payment of all or any portion of the obligations under any
Senior Indebtedness or (ii) there exists a default in any covenant with respect
to the Senior Indebtedness that would permit acceleration of the maturity
thereof (other than as specified in clause (i) of this sentence) which has not
been cured or waived and is continuing, and the Trustee and the Company receive
written notice from any holder of such Senior Indebtedness stating that no
payment may be made with respect to the Notes, provided that no such default
will prevent any payment on, or with respect to, the Notes for more than 120
days unless the maturity of such Senior Indebtedness is accelerated.

The Holders will be subrogated to the rights of the holders of the Senior
Indebtedness to the extent of payments made on Senior Indebtedness upon any
distribution of assets in any such proceedings out of the distributive share of
the Notes.

"Senior Indebtedness" means the principal of (and premium, if any) and
accrued interest on (a) existing indebtedness of the Company (including
indebtedness of others guaranteed by the Company) other than the Notes, which
is (i) for money borrowed or (ii) evidenced by a note or similar instrument
given in connection with the acquisition of any businesses, properties or
assets of any kind, (b) obligations of the Company as lessee under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and leases of property or assets made as part of
any sale and leaseback transaction to which the Company is a party, (c)
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation and (d) future indebtedness of the Company described
in (a) above, and amendments, renewals, extensions, modifications and
refundings thereof, if the instrument creating or evidencing such future
indebtedness provides that such indebtedness or obligation is senior in right
of payment to the Notes. Senior Indebtedness does not include indebtedness or
amounts owed (except to banks or other financial institutions) for compensation
to employees, or for goods or materials purchased, or services utilized, in the
ordinary course of business of the Company or of any other person from whom
such indebtedness or amount was assumed.

The Notes are unsecured obligations of the Company, and, accordingly, will
rank pari passu with all obligations of the Company that arise by operation of
law or are imposed by any judicial or governmental authority. The Notes are
obligations exclusively of the Company, and accordingly, will be effectively
subordinated to all indebtedness and other liabilities and commitments
(including trade payables and lease obligations) of its Subsidiaries. The right
of the Company, and, therefore, the right of creditors of the Company
(including Holders) to receive assets of any such Subsidiary upon the
liquidation or reorganization of such Subsidiary or otherwise, as a practical
matter, will be effectively subordinated to the claims of such Subsidiary's
creditors, except to the extent the Company is itself recognized as a creditor
of such Subsidiary or such other creditors have agreed to subordinate their
claims to the payment of the Notes, in which case the claims of the Company
would still be subordinate to any secured claim on the assets of such
Subsidiary and any indebtedness of such Subsidiary senior to that held by the
Company.

At October 31, 1997, after giving effect to this offering and the
application of the net proceeds therefrom, the Company's subsidiaries would
have had approximately $11 million of outstanding

40

indebtedness, of which approximately $6 million is guaranteed by the Company
and constitutes Senior Indebtedness. The Company expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.

LIMITATION ON DIVIDEND RESTRICTIONS AFFECTING SUBSIDIARIES

The Company may not, and may not permit any of its Subsidiaries to, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction of any kind on the ability of any subsidiary to (a) pay to the
Company dividends or make to the Company any other distribution of its capital
stock, (b) pay any debt owed to the Company or any other subsidiary, (c) make
loans or advances to the Company or any other subsidiary, or (d) transfer any
of its property or assets to the Company or any other subsidiary, other than
such encumbrances or restrictions existing or created under or by reason of (i)
applicable laws, (ii) the Indenture, (iii) covenants or restrictions contained
in any instrument governing debt of the Company or any of the subsidiaries
existing on the date of the Indenture or thereafter, (iv) customary provisions
restricting subletting, assignment and transfer of any lease governing a
leasehold interest of the Company or any of the subsidiaries or in any license
or other agreement entered into in the ordinary course of business, (v) any
agreement governing debt of a person acquired by the Company or any of the
subsidiaries in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrances or restrictions are not applicable
to any person, or the property or assets of any person, other than the person,
or the property or assets of the person, so acquired, or (vi) any restrictions
with respect to a subsidiary imposed pursuant to an agreement entered into in
accordance with the terms of the Indenture for the sale or disposition of
capital stock or property or assets of such subsidiary, pending the closing of
such sale of disposition.

CONSOLIDATION, MERGER AND SALE OF ASSETS

The Company may not, without the consent of the Holders of a majority in
aggregate principal amount of Notes then outstanding, consolidate with or merge
into any other entity or convey, transfer, sell or lease its assets
substantially as an entirety to any entity unless: (i) either (a) the Company
is the continuing corporation or (b) the entity formed by such consolidation or
into which the Company is merged or the entity to which such assets are sold,
leased, transferred, conveyed or disposed is organized under the laws of the
United States or any state thereof or the District of Columbia and expressly
assumes by supplemental indenture all obligations of the Company under the
Notes and the Indenture, (ii) immediately before and immediately after giving
effect to such merger, consolidation, conveyance, transfer, sale, lease or
disposition no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, under the Indenture has
occurred and is continuing, (iii) immediately after giving effect to such
merger, consolidation, conveyance, transfer, sale, lease or disposition, the
Notes and the Indenture, as supplemented, will be valid and enforceable
obligations of the Company or such successor and (iv) the Company has delivered
to the Trustee an Officer's Certificate and an opinion of counsel, each stating
that such merger, consolidation, conveyance, transfer, sale, lease or
disposition and such supplemental indenture comply with the applicable
provisions of the Indenture.

EVENTS OF DEFAULT

The following will be Events of Default under the Indenture: (a) failure
to pay principal or premium or repurchase price, if any, of any Note when due
and payable, whether at maturity, upon redemption, upon a Change of Control
Offer or otherwise, whether or not such payment is prohibited by the
subordination provisions of the Indenture; (b) failure to pay any interest on
any Note when due, which failure continues for 30 days, whether or not such
payment is prohibited by the subordination provisions of the Indenture; (c)
failure to perform the other covenants of the Company in the Indenture, which
failure continues for 90 days after written notice as provided in the
Indenture; (d) failure to pay when due principal of, or acceleration of, any
indebtedness for money borrowed by the Company or any of its Subsidiaries in
excess of $5.0 million, individually or in the aggregate, if such indebtedness
is not discharged, or such acceleration is not annulled, within 10 days after
written notice

41

as provided in the Indenture; and (e) certain events of bankruptcy, insolvency
or reorganization of the Company or any Significant Subsidiary (as defined in
the Indenture). Subject to the provisions of the Indenture relating to the
duties of the Trustee in case of the occurrence of an Event of Default, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any Holders, unless such
Holders have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, Holders of a majority in
aggregate principal amount of the outstanding Notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.

If an Event of Default occurs and is continuing, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Notes by notice to the Company and Trustee may declare the unpaid principal and
premium, if any, of and interest on all outstanding Notes due and payable;
provided, however, that if an Event of Default under clause (e) above occurs,
all unpaid principal and premium, if any, of and interest on all outstanding
Notes will automatically become due and payable without any declaration or
other act on the part of the Trustee or any Holders. After such acceleration,
but before a judgment or decree based on acceleration, Holders of a majority in
aggregate principal amount of the then outstanding Notes may, under certain
circumstances, rescind and annul such acceleration if all Events of Default,
other than the nonpayment of accelerated principal, have been cured or waived
as provided in the Indenture. For information as to waiver of defaults, see
"--Modifications, Amendments and Waivers."

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder unless (i) such Holder has previously given to the
Trustee written notice of a continuing Event of Default, (ii) Holders of at
least 25% in aggregate principal amount of the then outstanding Notes have made
written request and offered satisfactory indemnity to the Trustee to institute
such proceeding as Trustee, (iii) the Trustee failed to institute such
proceeding within 60 days after the receipt of such request and offer of
indemnity and (iv) during such 60-day period, no direction inconsistent with
such request is given to the Trustee by the Holders of a majority in aggregate
principal amount of the then outstanding Notes.

MODIFICATIONS, AMENDMENTS AND WAIVERS

Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the then outstanding Notes held by persons other than
affiliates of the Company; provided however that no such modification or
amendment may, without the consent of the Holder of each outstanding Note
affected thereby, (i) change the stated maturity of, or any installment of
interest on, or waive a default in the payment of principal, premium, if any,
or interest on, any Note, (ii) reduce the principal amount of any Note or
reduce the rate or extend the time of payment of interest on any Note, (iii)
increase the Conversion Price (other than in connection with a reverse stock
split as provided in the Indenture), (iv) change the currency of payment of
principal or premium or repurchase price, if any, of or interest on, any Note,
(v) impair the right to institute suit for the enforcement of any payment on or
with respect to any Note, (vi) adversely affect the right to exchange or
convert Notes, (vii) reduce the vote of Holders necessary to waive certain
defaults or compliance with certain provisions of the Indenture, consent to any
merger, consolidation or conveyance, sale, transfer or lease of assets, or
modify or amend the Indenture, (viii) modify the provisions of the Indenture
with respect to the subordination of the Notes in a manner adverse to the
Holders, (ix) except as permitted by the Indenture, consent to the assignment
or transfer by the Company of any of its rights and obligations thereunder or
(x) modify the provisions of the Indenture with respect to the obligations of
the Company to repurchase Notes in a manner adverse to the Holders.

Holders of a majority in aggregate principal amount of the then
outstanding Notes held by persons other than affiliates of the Company may, on
behalf of all Holders, waive any past default under the Indenture or Event of
Default, except a default in the payment of principal or premium or repurchase

42

price, if any, of or interest on any of the Notes or a provision which under
the Indenture cannot be amended without the consent of the Holder of each
outstanding Note.

Amendments and supplements of the Indenture may be made by the Company and
the Trustee without the consent of any Holder, in part, to: (i) cure any
ambiguity, defect or inconsistency (which does not adversely affect the rights
of any Holder); (ii) comply with the restriction on mergers, consolidations,
and asset sales or with the provisions relating to conversion upon such events;
(iii) add to the covenants of the Company further covenants, restrictions,
conditions or provisions for the protection of the Holders; (iv) make any
change that does not adversely affect the rights of any Holder under the
Indenture; (v) comply with requirements of the Securities and Exchange
Commission in order to effect or maintain qualification of the Indenture under
the Trust Indenture Act; or (vi) to change the place of payment of principal or
premium or repurchase price, if any, of or interest on the Notes other than
within the 48 contiguous states of the United States.

GOVERNING LAW

The Indenture and the Notes will be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
such State's conflict of law principles.

43

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain U.S. federal income tax
considerations relating to the purchase, ownership and disposition of a Note
and of Common Stock into which the Note may be converted. This summary is based
on the Internal Revenue Code of 1986, as amended (the "Code"), existing,
temporary and proposed Treasury Regulations, administrative pronouncements and
judicial decisions now in effect, all of which are subject to change, possibly
retroactively. This summary deals only with a Holder that will hold the Note
and the Common Stock into which the Note may be converted as a "capital asset"
(within the meaning of section 1221 of the Code) and that is (i) a citizen or
resident of the United States, (ii) a domestic corporation or (iii) otherwise
subject to U.S. federal income taxation on a net income basis in respect of the
Note or Common Stock. This summary does not purport to be a complete analysis
of all the potential tax considerations relevant to a particular investor and
does not address tax considerations applicable to an investor that may be
subject to special tax rules, like a bank, tax-exempt organization, insurance
company, dealer in securities or currencies, or a person that will hold a Note
or Common Stock as a position in a hedging transaction, "straddle" or
"conversion transaction" for tax purposes. This summary discusses the tax
considerations applicable to the initial purchaser of a Note who purchases the
Note at an original "issue price" (as defined in section 1273 of the Code)
equal to the stated principal amount of the Note. The Company has not sought
any ruling from the Internal Revenue Service (the "IRS") with respect to the
statements made in this summary, and there can be no assurance that the IRS
will agree with these statements.

A PROSPECTIVE INVESTOR CONSIDERING THE PURCHASE OF A NOTE SHOULD CONSULT
HIS OWN TAX ADVISER WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL TAX
LAWS TO HIS PARTICULAR SITUATION AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER
THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY
APPLICABLE TAX TREATY.

PAYMENT OF INTEREST

Interest on a Note generally will be includable in the income of a Holder
as ordinary income at the time the interest is received or accrued in
accordance with the Holder's method of accounting for U. S. federal income tax
purposes.

SALE, EXCHANGE OR REDEMPTION OF THE NOTES

Upon a sale, exchange or redemption of a Note, a Holder generally will
recognize capital gain or loss equal to the difference between (i) the amount
of cash and the fair market value of any property received (except to the
extent attributable to accrued interest income not previously included in
income, which will be taxable as ordinary income) and (ii) the Holder's
adjusted tax basis in the Note. A Holder's adjusted tax basis in a Note
generally will equal the Holder's cost for the Note. Capital gain or loss will
be long-term capital gain or loss depending upon the Holder's holding period in
the Note at the time of sale, exchange or redemption. Capital gain recognized
by certain noncorporate Holders may be taxed at preferential rates that will
vary depending on whether the Note has been held for more than one year or 18
months on the date of disposition.

CONSTRUCTIVE DISTRIBUTIONS

If at any time (i) the Company distributes cash or property to its
shareholders or purchases Common Stock, and the distribution or purchase is
taxable as a dividend to those shareholders for U.S. federal income tax
purposes (e.g., a distribution of cash, evidences of indebtedness or other
assets of the Company, but generally not a distribution of stock or rights to
subscribe for stock paid on Common Stock) and pursuant to either the
anti-dilution provision of the Indenture or at the discretion of the Company
the Conversion Price of the Notes is decreased or (ii) under any other
circumstances, pursuant to the anti-dilution provision of the Indenture or at
the discretion of the Company the Conversion Price of the Notes is decreased,
the decrease in Conversion Price may be treated as a

44

constructive distribution to Holders of Notes (pursuant to section 305 of the
Code). A constructive distribution will be taxable as a dividend, return of
capital or capital gain in accordance with the earnings and profits rules
discussed under "--Dividends." A Holder of a Note therefore could have taxable
income as a result of an event pursuant to which he receives no cash or
property. Moreover, if there is not a full adjustment to the Conversion Price
of the Notes to reflect a stock dividend or other event increasing the
proportionate interest of the holders of the Common Stock in the assets or
earnings and profits of the Company, then that increase in the proportionate
interest of the holders of Common Stock generally will be treated as a
constructive distribution to them similarly taxable in accordance with the
earnings and profits rules discussed under "--Dividends."

CONVERSION OF THE NOTES

A Holder of a Note generally will not recognize any income, gain or loss
upon conversion of a Note into shares of Common Stock except with respect to
the receipt of either cash in lieu of a fractional share of Common Stock or
cash or Common Stock attributable to accrued interest on the converted Note. A
Holder's tax basis in the Common Stock received on conversion of a Note will be
the same as the Holder's adjusted tax basis in the Note at the time of
conversion (reduced by any basis allocable to a fractional share interest). The
holding period for the shares of Common Stock received on conversion generally
will include the holding period of the Note converted.

Cash received in lieu of a fractional share of Common Stock upon
conversion of a Note will be treated as a payment in exchange for the
fractional share and generally will result in capital gain or loss (measured by
the difference between the cash received for the fractional share and the
Holder's adjusted tax basis in the fractional share).

DIVIDENDS

A cash distribution paid on Common Stock will be treated as a dividend,
taxable as ordinary income to the Holders, to the extent of the Company's
current and accumulated earnings and profits. To the extent a distribution on
Common Stock exceeds the Company's current and accumulated earnings and
profits, a Holder will treat the distribution on each share of Common Stock as
a nontaxable reduction in the Holder's basis in that share to the extent
thereof and thereafter as capital gain. A dividend paid to a Holder that is a
U.S. corporation may qualify for a dividends received deduction.

SALE OF COMMON STOCK

Upon a sale or exchange of Common Stock, a Holder generally will recognize
capital gain or loss equal to the difference between (i) the amount of cash and
the fair market value of any property received and (ii) the Holder's adjusted
tax basis in the Common Stock. That capital gain or loss will be long-term
capital gain or loss depending upon the Holder's holding period in the Common
Stock at the time of sale, exchange or redemption. Capital gain recognized by
certain noncorporate Holders may be taxed at preferential rates that will vary
depending on whether the Common Stock has been held for more than one year or
18 months on the date of disposition. A Holder's basis and holding period in
Common Stock received upon conversion of a Note are determined as discussed
above under "Conversion of the Notes."

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

In general, information reporting requirements will apply to payments to
certain noncorporate Holders of principal of, premium, if any, and interest on
a Note, payments of dividends on Common Stock and payments of the proceeds of a
sale of a Note or Common Stock. A 31% backup withholding tax may apply to any
of those payments if the Holder (i) fails to furnish or certify his correct
taxpayer identification number to the payor in the manner required, (ii) is
notified by the IRS that he has failed to report payments of interest or
dividends properly or (iii) under certain circumstances fails to certify that
he has not been notified by the IRS that he is subject to backup withholding
for failure to report

45

interest or dividend payments. A Holder of a Note or Common Stock who does not
provide the Company with his or her correct taxpayer identification number may
also be subject to penalties imposed by the IRS. Any amounts withheld under the
backup withholding rules from a payment to a Holder will be allowed as a credit
against the Holder's U.S. federal income tax and may entitle the Holder to a
refund provided the required information is furnished to the IRS.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue 20,000,000 shares of Common Stock, par
value $.01 per share, 10,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock") and 50,000 shares of Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock"). As of October
31, 1997, 5,522,329 shares of Common Stock were outstanding and such shares
were held by approximately 1,265 holders of record. None of the Preferred Stock
nor the Series A Preferred Stock are outstanding.

The following descriptions of the Common Stock, the Preferred Stock and
the Series A Preferred are based on the Company's Articles and Bylaws and
applicable Florida law.

COMMON STOCK

Each holder of Common Stock is entitled to one vote for each share owned
of record on all matters presented to the shareholders. In the event of a
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share equally and ratably in the assets of the Company,
if any, remaining after the payment of all debts and liabilities of the Company
and the liquidation preference of any outstanding Preferred Stock. The Common
Stock has no preemptive rights, no cumulative voting rights and no redemption,
sinking fund or conversion provisions. Currently, 1,742,919 shares of Common
Stock are reserved for issuance under the Company's option plans.

Holders of Common Stock are entitled to receive dividends if, as and when
declared by the Board out of funds legally available therefor, subject to the
dividend and liquidation rights of any Preferred Stock that may be issued and
outstanding and subject to any dividend restrictions in the Company's credit
facilities. No dividends or other distributions (including redemptions or
repurchases of shares of capital stock) may be made if after giving effect to
any such dividends or distributions, the Company would not be able to pay its
debts as they become due in the usual course of business or the Company's total
assets would be less than the sum of its total liabilities plus the amount that
would be needed at the time of a liquidation to satisfy the preferential rights
of any holders of Preferred Stock.

The transfer agent and registrar for the Common Stock is Chase Mellon
Securities Services, Seattle, Washington.

PREFERRED STOCK AND SERIES A PREFERRED STOCK

The Board of Directors of the Company is authorized, without further
shareholder action, to designate and issue from time to time one or more series
of Preferred Stock, including the Series A Preferred Stock. The Board of
Directors may fix and determine the designations, preferences and relative
rights and qualifications, limitations or restrictions of any series of
Preferred Stock so established, including voting powers, dividend rights,
liquidation preferences, redemption rights and conversion privileges. Because
the Board of Directors has the power to establish the preferences and rights of
each series of Preferred Stock, it may afford the holders of any series of
Preferred Stock preferences and rights, voting or otherwise, senior to the
rights of holders of Common Stock. Holders of the Series A Preferred Stock
shall be entitled to receive (i) distributions or cash dividends in an amount
per share equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on

46

the Common Stock, (ii) a preferential stock dividend, and (iii) in certain
circumstances to 100 votes per share. As of the date of this Prospectus, the
Board of Directors has not issued any Preferred Stock or Series A Preferred
Stock, and has no plans to issue any shares of Preferred Stock or Series A
Preferred Stock.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF FLORIDA LAW AND THE COMPANY'S
ARTICLES OF INCORPORATION AND BYLAWS

Certain provisions of the Articles and Bylaws of the Company and Florida
law summarized in the following paragraphs may be deemed to have an
anti-takeover effect and may discourage, delay, defer or prevent a tender offer
or takeover attempt that a shareholder might consider in its best interest,
including those attempts that might result in a premium over the market price
for the shares held by shareholders.

SPECIAL MEETING OF SHAREHOLDERS. The Bylaws provide that special meetings
of shareholders of the Company may be called only by the Company's Chairman of
the Board, the President of the Company or by a majority of the Board. This
provision could make it more difficult for shareholders to take actions opposed
by the Board.

PREFERRED STOCK PURCHASE RIGHTS PLAN. In November 1993, the Company
declared a distribution of the Rights for each outstanding share of Common
Stock. Such Rights trade with the Common Stock and are not exercisable or
transferable apart from the Common Stock until a person or group acquires 15%
or more of the outstanding Common Stock or commence or announce an intention to
commence a tender offer for 30% or more of the outstanding Common Stock. The
Rights shall expire on November 2, 2003 and have certain anti-takeover effects
that will cause substantial dilution to a person or a group who attempts to
acquire the Company on terms not approved by the Board or who acquires 15% or
more of the outstanding Common Stock without approval of the Board.

AUTHORIZED BUT UNISSUED SHARES. Subject to the applicable requirements of
the American Stock Exchange, the authorized but unissued shares of Common
Stock, Preferred Stock and Series A Preferred Stock are available for future
issuance without shareholder approval. These additional shares may be utilized
for a variety of corporate purposes, including future public offerings to raise
additional capital, corporate acquisitions or employee benefit plans. The
existence of authorized but unissued and unreserved Common Stock. Preferred S
and Series A Preferred Stock may enable the Board to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger or otherwise, and thereby protect the continuity of the Company's
management.

CERTAIN FLORIDA LEGISLATION. The State of Florida has enacted legislation
that may deter or frustrate takeovers of Florida corporations. The Florida
Control Share Act generally provides that shares acquired in excess of certain
specified thresholds will not possess any voting rights unless such voting
rights are approved by a majority of a corporation's disinterested
shareholders. The Florida Affiliated Transactions Act generally requires
supermajority approval by disinterested shareholders of certain specified
transactions between a public corporation and holders of more than 10% of the
outstanding voting shares of the corporation (or their affiliates). Florida law
and the Company's Articles also authorize the Company to indemnify the
Company's directors, officers, employees and agents under certain circumstances
and presently limit the personal liability of corporate directors for monetary
damages, except where the directors (i) breach their fiduciary duties and (ii)
such breach constitutes or includes certain violations of criminal law, a
transaction from which the directors derived an improper personal benefit,
certain unlawful distributions or certain other reckless, wanton or willful
acts or misconduct. The Company may also indemnify any person who was or is a
party to any proceeding by reason of the fact that he is or was a director,
officer, employee or agent of such corporation (or is or was serving at the
request of such corporation in such a position for another entity) against
liability to be in the best interests of such corporation and, with respect to
criminal proceedings, had no reasonable cause to believe his conduct was
unlawful.

47

UNDERWRITING

Subject to the terms and conditions of an underwriting agreement (the
"Underwriting Agreement") among the Company and the Underwriters named below
(the "Underwriters"), the Company has agreed to sell to each of the
Underwriters named below, and each of such Underwriters have severally agreed
to purchase from the Company, the principal amount of Notes set forth opposite
its name below.

The Underwriting Agreement provides that the obligations of the
Underwriters to purchase the Notes are subject to certain conditions. The
Underwriters are committed to purchase all of such Notes if any of such Notes
are purchased.

The Company has been advised by the Underwriters that the Underwriters
propose to offer the Notes to the public initially at the public offering price
set forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of % of the principal amount of the
Notes. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of % of the principal amount of Notes to other dealers.
After this offering, the public offering price, the concession to selected
dealers and the reallowance to other dealers may be changed by the
Underwriters.

The Company has granted to the Underwriters an option, expiring 30 days
from the date of this Prospectus, to purchase from the Company up to an
aggregate of $11,250,000 additional principal amount of Notes at the public
offering price less the underwriting discount set forth on the cover page of
this Prospectus solely to cover over-allotments, if any. To the extent that the
Underwriters exercise such option, each of the Underwriters will have a firm
commitment, subject to certain conditions, to purchase approximately the same
percentage thereof that the principal amount of the Notes to be purchased by
each of them shown in the above table bears to the aggregate principal amount
of the Notes offered hereby.

The Notes will not be listed on any securities exchange or the Nasdaq
National Market. The Underwriters have advised the Company that they intend to
make a market in the Notes. The Underwriters are not obligated, however, to
make a market in the Notes, and any such market making may be discontinued at
any time at the sole discretion of the Underwriters without notice.

The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act, and to contribute to certain payments
that the Underwriters may be required to make in respect thereof.

In connection with this Offering, certain Underwriters and their
respective affiliates may engage in transactions that stabilize, maintain, or
otherwise affect the market price of the Notes or the Common Stock. Such
transactions may include stabilization transactions effected in accordance with
Rule 104 of Regulation M under the Securities Exchange Act of 1934, as amended,
pursuant to which such persons

48

may bid for or purchase Notes or the Common Stock for the purpose of
stabilizing their market price. The Underwriters also may create a short
position for their respective accounts by selling more Notes in connection with
this Offering than they are committed to purchase from the Issuer, and in such
case may purchase Notes in the open market following completion of this
Offering to cover all or a portion of such short position. In addition, Forum
Capital Markets L.P., on behalf of the Underwriters, may impose "penalty bids"
under contractual arrangements between the Underwriters whereby it may reclaim
from an Underwriter (or dealer participating in this Offering) for the account
of the Underwriters, the selling concession with respect to Notes that are
distributed in this Offering but subsequently purchased for the account of the
Underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Notes or the Common
Stock at a level above that which might otherwise prevail in the open market.
None of the transactions described in this paragraph are required, and, if they
are undertaken, they may be discontinued at any time.

The Underwriters have in the past performed, and may in the future
perform, investment banking or financial advisory services for the Company. In
September 1997, Forum Capital Markets L.P. purchased the Convertible Note for
its stated par value from the Company.

LEGAL MATTERS

Certain legal matters in connection with the offering and sale of the
Notes will be passed upon for the Company by Greenberg Traurig Hoffman Lipoff
Rosen & Quentel, P.A., Miami, Florida. The validity of the Notes will be passed
upon for the Underwriters by Paul, Hastings, Janofsky & Walker LLP, New York,
New York.

EXPERTS

The financial statements included and incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
October 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is included and incorporated herein
by reference, and have been so included and incorporated in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.

The financial statements of Northwings as of and for the year ended
December 31, 1996 incorporated herein by reference have been audited by De La
Osa & Associates, P.A., independent auditors, as set forth in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
such firm as experts in accounting and auditing.

The financial statements of Trilectron as of and for the years ended
December 31, 1995 and 1994 incorporated herein by reference, have been audited
by Kerkering, Barberio & Co., independent auditors, as set forth in their
report with respect thereto, and are incorporated herein in reliance upon the
authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
and information statements and other information filed by the Company may be
inspected and copies may be obtained (at prescribed rates) at the Commission's
Public Reference Section, 450 5th Street, N.W., Washington, D.C. 20549, as well
as the following Regional Offices of the Commission: Seven World Trade Center,
13th Floor, New York, New York

49

10048 and at Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can also be obtained by
mail from the Public Reference Section, Securities and Exchange Commission, 450
Fifth Street, N.W., Washington D.C. 20549, upon payment of prescribed rates. In
addition, electronically filed documents, including reports, proxy and
information statements and other information regarding the Company, can be
obtained from the Commission's Web site at: http://www.sec.gov. The Company's
Common Stock is traded on the American Stock Exchange, and reports, proxy
statements and other information concerning the Company can also be inspected
at the offices of the National Association of Securities Dealers, Inc. at 1735
K Street, Washington, D.C. 20006.

The Company has filed a Registration Statement on Form S-3 under the
Securities Act with respect to the Notes offered hereby (the "Registration
Statement"). This Prospectus does not contain all the information set forth in
the Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and such Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits, schedules and
reports filed as part thereof. Statements contained in the Prospectus with
respect to the contents of any contract or other document filed as an exhibit
to the Registration Statement are not necessarily complete, and in each such
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement. Each such statement is qualified
in all respects by such reference to such exhibit. Copies of all or any part of
the Registration Statement, including the documents incorporated by reference
therein or exhibits thereto, may be obtained upon payment of the prescribed
rates at the offices of the Commission set forth above.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act are hereby incorporated by reference in this Prospectus:

(1) The Company's Annual Report on Form 10-K for the year ended October
31, 1996;

(2) The Company's Quarterly Report on Form 10-Q for the three months ended
January 31, for the six months ended April 30, and for the nine months
ended July 31, 1997;

(3) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A; and

(4) The Company's Current Reports on Form 8-K, dated September 16, 1996 and
on Form 8-K, dated September 16, 1997.

All documents filed by the Company pursuant to sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Notes shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.

The Company will provide without charge to each person to whom a
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Prospectus (excluding exhibits unless such exhibits are specifically
incorporated by reference into such documents). Please direct such requests to
the Chief Financial Officer, HEICO Corporation, 3000 Taft Street, Hollywood,
Florida, 33021, telephone number (954) 987-4000.

The following unaudited pro forma consolidated condensed balance sheet and
statements of operations utilize the historical financial condition and results
of operations of HEICO Corporation and subsidiaries (the "Company") as of July
31, 1997, and for the nine months then ended and for the year ended October 31,
1996. The unaudited pro forma consolidated condensed financial statements have
been prepared on the basis summarized below:

/bullet/ The unaudited pro forma consolidated condensed balance sheet as of
July 31, 1997, assumes that the Company's acquisition of Northwings
Accessories Corporation and the sale of a 20% minority interest in the
Company's Flight Support Group to Lufthansa Technik AG, the technical
services subsidiary of Lufthansa German Airlines ("Lufthansa"), had
been consummated as of that date.

/bullet/ The unaudited pro forma consolidated condensed statement of operations
for the nine months ended July 31, 1997, assumes that the Company's
acquisition of Northwings Accessories Corporation and the sale of a
20% minority interest in the Company's Flight Support Group to
Lufthansa had been consummated as of November 1, 1995.

/bullet/ The unaudited pro forma consolidated condensed statement of operations
for the year ended October 31, 1996, assumes that the Company's
acquisition of Trilectron Industries, Inc., its acquisition of
Northwings Accessories Corporation and the sale of a 20% minority
interest in the Company's Flight Support Group to Lufthansa had been
consummated as of November 1, 1995.

The unaudited pro forma consolidated condensed financial statements referenced
above do not include any future income to be received from its October 1997
strategic alliance with Lufthansa. Lufthansa invested approximately $26 million
in the Flight Support Group, including $16 million to be paid to the Flight
Support Group over three years pursuant to a research and development
cooperation agreement which will partially fund accelerated development of
additional FAA Approved Replacement Parts for jet engines. In addition,
Lufthansa and the Flight Support Group have agreed to cooperate with technical
services and marketing support for jet engine parts on a worldwide basis.

The unaudited pro forma consolidated condensed statements of operations are not
necessarily indicative of actual operating results had the acquisitions been
made at the beginning of the period presented or of future results of
operations.

(4) Represents the decrease in accounts receivable and increases in inventory,
deferred income taxes, current liabilities and non-current liabilities,
which are to record allowances and reserves utilizing the Company's
methodology, as well as their fair market values and the excess of cost
over the fair value of net assets acquired from the acquisition of
Northwings. The origins of the purchase cost and its allocation to assets
and liabilities is as follows:

(5) Represents the sale of the $10 million note receivable from US Diagnostic
Inc. ("USDL"), to one of the Underwriters for $10,137,000, including
interest income of $137,000, of which $54,000 was accrued as of July 31,
1997. The proceeds of the sale were partially used to fund the acquisition
of Northwings.

(6) Represents 20% minority interest in the net assets of the Company's Flight
Support Group, as of July 31, 1997, acquired by Lufthansa.

(7) Represents the estimated net gain on sale of minority interest in the
Company's Flight Support Group, the additional interest income from the
sale of the USDL note receivable and the issuance of 154,907 additional
common shares of the Company as a portion of the Northwings purchase
price, net of the elimination of Northwings' common stock and retained
earnings as follows:

The gain on sale of minority interest as calculated above is based on the
excess of the purchase price of the 20% interest over the basis of net
assets of the Company's Flight Support Group.

(8) Represents Northwings' statement of operations for the nine months ended
June 30, 1997. Northwings' operating results are included in the
consolidated operating results of the Company effective as of September 1,
1997, the date of the acquisition.

(9) Represents the amortization of the excess of costs over the fair value of
net assets acquired in the Trilectron and Northwings purchases over 20
years and the increased depreciation of property, plant and equipment over
7 years, net of the elimination of non-recurring shareholder expenses of
Northwings as follows:

(10) Represents the investment income on the estimated $9.8 million net
proceeds from the sale of the minority interest in the Company's Flight
Support Group, net of the $7.4 million cash used for the acquisition of
Northwings as follows:

NINE MONTHS ENDED
JULY 31, 1997
-------------------
Investment income on proceeds from sale of minority interest at an
assumed annual investment yield of 5.9% ..................... $ 446,000
Reduced investment income on cash used for the acquisition of
Northwings at 6.5% .......................................... (361,000)
----------
$ 85,000
==========

(11) Represents an increase in Federal and state income taxes associated with
adjustments to pre-tax income, as well as the non-deductibility, for tax
purposes, of amortization of the excess of costs over the fair value of
net assets acquired in the Northwings purchase included in the pro forma
adjustments.

(12) Represents the minority interest in income of the Company's Flight Support
Group for the periods ended July 31, 1997 and October 31, 1996.

(13) Represents increase in the Company's common shares outstanding as a result
of shares issued as part of the acquisition cost of Northwings.

(14) As reported for the fiscal year ended October 31, 1996.

(15) Represents Trilectron's unaudited statement of operations for the ten
months ended August 31, 1996. Trilectron's operating results are included
in the consolidated operating results of the Company effective as of
September 1, 1996, the date of acquisition.

(16) Represents Northwings' statement of operations for the year ended December
31, 1996.

(17) Represents the investment income on the estimated $9.8 million net
proceeds from the sale of the minority interest in the Company's Flight
Support Group net of the $7.4 million cash used for the Trilectron
acquisition and the $7.4 million cash used for the Northwings acquisition
as follows:

YEAR ENDED
OCTOBER 31, 1996
------------------
Investment income on proceeds from sale of minority interest at an
assumed annual investment yield of 5.2% ........................... $ 522,000
Reduced investment income on cash used for the acquisition of Northwings
at 5.4% ............................................................ (414,000)
Reduced investment income on cash used for the acquisition of Trilectron
at 5.0% ............................................................ (306,000)
----------
$ (198,000)
==========

* * * * * * * *

F-9

HEICO CORPORATION AND SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and
Shareholders of HEICO Corporation

We have audited the accompanying consolidated balance sheets of HEICO
Corporation and subsidiaries (the "Company") as of October 31, 1995 and 1996,
and the related consolidated statements of operations, shareholders' equity,
and cash flows for each of the three years in the period ended October 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of October 31,
1995 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended October 31, 1996 in conformity with
generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for income taxes effective November 1,
1993 to conform with Statement of Financial Accounting Standards No. 109.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

HEICO Corporation (the Company), through its subsidiaries, HEICO Aerospace
Corporation (HEICO Aerospace), including its subsidiaries, Jet Avion
Corporation (Jet Avion), LPI Industries Corporation (LPI), and Aircraft
Technology, Inc. (Aircraft Technology), and HEICO Aviation Products Corp.
(HEICO Aviation) and its subsidiary, Trilectron Industries, Inc. (Trilectron),
is engaged in the design, manufacture and sale of aerospace products and
services throughout the United States and abroad. Its customer base is
primarily the commercial airline industry. As of October 31, 1996, the
Company's principal operations are located in Hollywood and Palmetto, Florida.

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned. All significant
intercompany balances and transactions are eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

For purposes of the consolidated financial statements, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.

SHORT-TERM INVESTMENTS

Investments with a maturity of less than one year that are not readily
convertible to cash before their maturity are classified as short-term
investments and are stated at their fair value (see Note 8).

INVENTORIES

Portions of the HEICO Aerospace and Trilectron inventories are stated at
the lower of cost or market, with cost being determined on the first-in,
first-out basis. The remaining portions of these inventories are stated at the
lower of cost or market, on a per contract basis, with estimated total contract
costs being allocated ratably to all units. The effects of changes in estimated
total contract costs are recognized in the period determined. Losses, if any,
are recognized fully when identified.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost. Depreciation and
amortization is provided mainly on the straight-line method over the estimated
useful lives of the various assets, including assets recorded under capital
leases which are amortized over the shorter of their useful lives or the term
of the related leases. Property, plant and equipment useful lives are as
follows:

F-16

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

Buildings and components ...... 7 to 55 years
Building improvements ......... 3 to 15 years
Machinery and equipment ......... 3 to 20 years

The costs of major renewals and betterments are capitalized. Repairs and
maintenance are charged to operations as incurred. Upon disposition, the cost
and related accumulated depreciation are removed from the accounts and any
related gain or loss is reflected in earnings.

INTANGIBLE ASSETS

Intangible assets include the excess of cost over the fair value of net
assets acquired and deferred charges which are amortized on the straight-line
method over their legal or estimated useful lives, whichever is shorter, as
follows:

Excess of cost over the fair market value of net assets acquired ..... 20 to 40 years
Deferred charges ..................................................... 3 to 20 years

The Company continually evaluates the periods of intangible asset
amortization to determine whether events and circumstances subsequent to the
origination dates of such assets warrant revised estimates of useful lives. In
addition, the Company periodically reviews the excess of cost over the fair
value of net assets acquired (goodwill) to assess recoverability based upon
expectations of undiscounted cash flows and operating income of each
consolidated entity having a material goodwill balance. An impairment would be
recognized in operating results, based upon the difference between each
consolidated entity's respective present value of future cash flows and the
carrying value of the goodwill, if a permanent diminution in value were to
occur. There have not been any significant revised estimates nor recognition of
goodwill impairment during the three years ended October 31, 1996.

FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, accounts receivable,
accounts payable and accrued expenses and other current liabilities approximate
fair value due to the relatively short maturity of the respective instruments.
The Company's financial instruments also include a note receivable (see Note 3)
and long-term debt (see Note 5).

The carrying amount of the note receivable is $10,000,000 as of October
31, 1996, which approximates its fair market value. Long-term debt at October
31, 1996 includes industrial development revenue bonds with a carrying value of
$5,480,000 and other long-term debt with a carrying value of $1,036,000. The
carrying value of long-term debt approximates fair market value due to its
floating interest rates.

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash investments
and trade receivables. The Company places its temporary cash investments with
high credit quality financial institutions and limits the amount of credit
exposure to any one financial institution. Concentrations of credit risk with
respect to trade receivables are limited due to the large number of customers
comprising the Company's customer base, and their dispersion across many
different geographical regions. At October 31, 1996, the Company had no
significant concentrations of credit risk.

F-17

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

REVENUE RECOGNITION

Revenues are recognized on an accrual basis, primarily upon shipment of
products and the rendering of services. Certain contracts of Trilectron are
long-term contracts and the related net costs and estimated earnings in excess
of billings, if any, are included in accounts receivable on a percentage of
completion basis. Revenue amounts set forth in the accompanying consolidated
statements of operations do not include any material amounts in excess of
billings related to long-term contracts.

INCOME TAXES

In fiscal 1994, the Company adopted, effective November 1, 1993, Statement
of Financial Accounting Standard (SFAS) No. 109 "Accounting for Income Taxes,"
which requires the use of the liability method of accounting for deferred
income taxes. The cumulative effect of this change in accounting for income
taxes is a $381,000 benefit ($.08 per share) and is reported separately in the
Consolidated Statements of Operations for the year ended October 31, 1994. The
provision for income taxes includes Federal, state and local income taxes
currently payable and those deferred because of temporary differences between
the financial statement and tax basis of assets and liabilities.

INCOME PER SHARE

Income per share is calculated on the basis of the weighted average number
of shares outstanding plus common share equivalents arising from the assumed
exercise of stock options, if dilutive, and has been adjusted for the effect of
any stock dividends and splits (see Note 4).

NEW ACCOUNTING STANDARD

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123). SFAS 123 established a fair value based method of
accounting for stock options. Entities may elect to either adopt the
measurement criteria of the statement for accounting purposes, thereby
recognizing an amount in results of operations on a prospective basis, or
disclose the pro forma effects of the new measurement criteria in Notes to
Consolidated Financial Statements. The Company intends to adopt the pro forma
disclosure features of SFAS 123, which are effective for fiscal year 1997.

NOTE 2--ACQUISITION

In September 1996, the Company, through HEICO Aviation, acquired effective
as of September 1, 1996 all of the outstanding stock of Trilectron for $7.0
million in cash and the assumption of debt aggregating $2.3 million. Trilectron
is a leading manufacturer of ground power, air conditioning and air starting
equipment for civil and military aircraft and is a designer and manufacturer of
certain military electronics.

The acquisition of Trilectron has been accounted for using the purchase
method of accounting and the purchase price has been assigned to the net assets
acquired based on the fair value of such assets and liabilities at the date of
acquisition. The excess of the purchase price over the fair value of the
identifiable net assets acquired amounted to $2,838,000, which will be
amortized over 20 years using the

F-18

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 2--ACQUISITION--(CONTINUED)

straight line method. The results of operations of Trilectron are included in
the consolidated statements of operations from September 1, 1996.

The following table presents unaudited pro forma consolidated operating
results as if the acquisition of Trilectron had occurred at the beginning of
fiscal 1995. The pro forma consolidated operating results do not purport to
present actual operating results had the acquisition been made at the beginning
of fiscal 1995, or the results which may occur in the future.

In July 1996, the Company consummated the sale of all of the outstanding
capital stock of its wholly-owned subsidiary MediTek Health Corporation
("MediTek"), representing the Company's health care services segment, to U.S.
Diagnostic Inc. ("USDL"). In consideration for the sale of MediTek, the Company
received $13,828,000 in cash and a five-year, 61/2% promissory note (the
"Convertible Note") in the principal amount of $10,000,000, which is
convertible, at the option of the Company, into 1,081,081 shares of USDL common
stock.

In order to assure the Company's liquidity with respect to the Convertible
Note and the USDL common stock into which it is convertible, USDL (i) granted
the Company demand and piggy-back registration rights with respect to such
shares of USDL common stock, and (ii) agreed to prepay the Convertible Note at
the Company's request at any time until such registration is completed. The
terms of such demand registration rights, as amended in December 1996, require
USDL to use its best efforts to cause a registration statement covering all of
the USDL common stock into which the Convertible Note is convertible to be
declared effective by the Securities and Exchange Commission by July 1, 1997.
The terms of such piggy-back registration rights give the Company rights to
include such USDL common stock in certain registration statements filed by USDL
from January 1, 1997 until January 1, 2000. Upon 15 days' prior written notice,
USDL may require the Company to convert the Convertible Note into USDL common
stock at any time beginning on the later of December 31, 1997 or the date that
such shares of USDL common stock have been registered, if the closing price of
the USDL common stock has averaged at least $9.25 per share for the immediately
preceding ten trading days. Also, beginning on December 31, 1997, USDL may
prepay the Convertible Note at any time upon 60 days' prior written notice. The
Company retains the right to convert the promissory note into the applicable
shares of USDL common stock at any time prior to prepayment.

The sale of MediTek resulted in a gain in fiscal 1996 of $5,264,000, net
of expenses and applicable income taxes. The income taxes on the gain are less
than the normal Federal statutory rate principally due to the utilization of a
$4.6 million capital loss carryforward partially offset by state income taxes.
MediTek's results of operations, net of taxes, for fiscal 1994, 1995 and 1996
have been reported separately as discontinued operations in the Consolidated
Statement of Operations. No amounts related to the discontinued operations
remain in the October 31, 1996 Consolidated Balance Sheet.

F-19

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 3--SALE OF HEALTH CARE OPERATIONS--(CONTINUED)

The condensed statement of operations related to the discontinued health
care services segment during fiscal years 1994, 1995 and 1996 are presented
below:

The effective tax rate used in calculating income tax expense related to
discontinued operations exceeds the normal Federal statutory tax rate due
principally to state income taxes.

With the sale of the health care services segment, the Company's
operations are within a single business segment, the aerospace products and
services industry.

NOTE 4--STOCK DIVIDENDS AND SPLIT

In May 1995, December 1995 and June 1996, the Company's Board of Directors
declared 10% stock dividends that were paid in July 1995, February 1996 and
July 1996, respectively. In March 1996, the Company's Board of Directors
declared a three-for-two stock split that was distributed in April 1996. On
December 13, 1996, the Company's Board of Directors declared a 10% stock
dividend payable January 17, 1997 to shareholders of record on January 8, 1997.
These transactions were valued based on the closing market prices of the
Company's stock as of their respective declaration dates. During fiscal 1996,
retained earnings was charged $20,963,000 as a result of the issuance of a
combined total of 2,354,785 shares of the Company's common stock.

During fiscal 1995, retained earnings was charged $7,881,000 as a result
of the issuance of a combined total of 483,558 shares of the Company's common
stock. All income per share, dividend per share and common shares outstanding
information has been retroactively restated to reflect these stock dividends
and split.

F-20

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

The amount of long-term debt maturing in each of the next five years is
$494,000 in fiscal 1997, $170,000 in fiscal 1998, $170,000 in fiscal 1999,
$138,000 in fiscal 2000 and $71,000 in fiscal 2001.

INDUSTRIAL DEVELOPMENT REVENUE BONDS

The industrial development revenue bonds represent bonds issued by Broward
County, Florida in 1996 (the 1996 bonds) and in 1988 (the 1988 bonds).

The 1996 bonds were issued in the amount of $3,500,000 for the purpose of
renovating and expanding the Hollywood facility. As of October 31, 1996, the
Company has been reimbursed $851,000 for such qualified expenditures and the
balance of the unexpended bond proceeds of $2,649,000 are held by the trustee
and is available for future qualified expenditures. The 1996 bonds are due
October 2011 and bear interest at a variable rate calculated weekly (3.75% at
October 31, 1996). The 1996 bonds are secured by a letter of credit expiring in
October 2001 and a mortgage on the related properties pledged as collateral.
The letter of credit requires annual sinking fund payments beginning October
2000 in the amount of $187,500.

The 1988 bonds are due April 2008 and bear interest at a variable rate
calculated weekly (3.70% at October 31, 1996). The 1988 bonds are secured by a
letter of credit expiring in February 1999, a bond sinking fund ($8,250 payable
monthly) and a mortgage on the related properties pledged as collateral.

The pledged properties for the 1996 and 1988 bonds have a carrying value
aggregating approximately $5,555,000 at October 31, 1996.

Trilectron has been approved by Manatee County, Florida for $3,000,000 of
industrial development revenue bonds to finance the construction of a larger
facility in Palmetto, Florida and the purchase of additional equipment. These
bonds are expected to be issued in fiscal 1997.

REVOLVING CREDIT FACILITY

The Company has a $7 million credit facility available for funding
acquisitions, working capital and general corporate requirements. Borrowings
under this credit facility bear interest at 0.25% over the

F-21

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

bank's prime rate, adjusted daily, and are convertible to term loans that bear
interest, at the Company's option, at 0.25% over the bank's prime rate,
adjusted daily, or a fixed interest rate of 200 basis points over the bank's
prime rate in effect on the day of the conversion. Term loan borrowings under
the credit facility are payable in 36 to 48 monthly installments. The credit
facility is secured by substantially all the assets of HEICO Aerospace and its
subsidiaries. The revolving portion of the facility expires in April 1997 and
may be renewed annually by mutual agreement. This credit facility and the
letters of credit securing the 1996 bonds and 1988 bonds contain covenants
which, among other things, restrict borrowings, capital expenditures and cash
dividends, require the maintenance of certain net worth, working capital and
debt service amounts and ratios, require the continued employment of the
current Chairman, President and Chief Executive Officer and require that he and
his affiliates maintain a specified ownership position in the Company.

In October 1994, the Company borrowed $950,000 from the $7 million credit
facility, of which $317,000 is outstanding as of October 31, 1996 with interest
accruing at 8.5% per annum.

EQUIPMENT LOAN FACILITY

In March 1994, a bank committed to advance up to $1,900,000, as amended in
fiscal 1995, for the purpose of purchasing equipment to be used in the
Company's operations. Each term loan is limited to 80% of the purchase price of
the related equipment and is repayable up to a maximum of 60 months with
interest at a rate equal to the bank's prime rate. The term loans are secured
by collateral representing the related purchased equipment, which has a
carrying value of approximately $905,000 at October 31, 1996. In December 1996,
the Company received a commitment to extend the facility until December 1997.

OTHER LONG-TERM DEBT

The mortgage note payable, capital leases and other long-term debt were
assumed by USDL as part of the sale of MediTek in July 1996. (See Note 3)

NOTE 6--LEASE COMMITMENTS

The Company leases certain property and equipment, including manufacturing
facilities and office equipment under operating leases. Some of these leases
provide the Company with the option after the initial lease term either to
purchase the property at the then fair market value or renew its lease at the
then fair rental value. Generally, management expects that leases will be
renewed or replaced by other leases in the normal course of business.

F-22

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 6--LEASE COMMITMENTS--(CONTINUED)

Minimum payments for operating leases having initial or remaining
noncancellable terms in excess of one year are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 7--INCOME TAXES--(CONTINUED)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets and liabilities as of October 31, 1994,
1995 and 1996 are as follows:

The $1,560,000 deferred tax asset related to the Company's $4.6 million
capital loss carryforward had a 100% valuation allowance as of October 31,
1994.

NOTE 8--INVESTMENT IN FINANCIAL INSTRUMENTS

In fiscal 1995, the Company entered into transactions in which it
simultaneously purchased and sold call options on an industry sector index of
equity securities (the Index Options) expiring in November 1995. The Index
Options were purchased with temporary surplus funds of approximately $2.9
million for investment purposes. Prior to the end of fiscal 1995, the Company
traded substantially all of the purchase option position and entered into a
similar purchase option position having the same November 1995 expiration date.
The gain realized in fiscal 1995 fully utilized the Company's $4.6 million
capital loss carryover. The deferred tax asset related to the Company's $4.6
million capital loss carryforward had a 100% valuation allowance as of October
31, 1994. As of October 31, 1995, the investments in the purchased and sold
call option contracts are netted because the terms of the Index Option
contracts provide for a right of offset. The net investment as of October 31,
1995 in the amount of $2.9 million is recorded at fair market value as
represented by the net cash proceeds realized upon

F-24

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 8--INVESTMENT IN FINANCIAL INSTRUMENTS--(CONTINUED)

termination of the option contracts in November 1995 and is included in
short-term investments. Upon termination of the option contracts in November
1995, the Company recognized a $4.6 million capital loss for income tax
purposes. For financial statement purposes, the transactions did not result in
any material gain or loss.

NOTE 9--PREFERRED STOCK PURCHASE RIGHTS PLAN

In November 1993, pursuant to a plan adopted by the Board of Directors on
such date, the Board declared a distribution of one Preferred Stock Purchase
Right (the Rights) for each outstanding share of common stock, par value $.01
per share, of the Company. The Rights trade with the common stock and are not
exercisable or transferable apart from the common stock until after a person or
group either acquires 15% or more of the outstanding common stock or commences
or announces an intention to commence a tender offer for 30% or more of the
outstanding common stock. Absent either of the aforementioned events
transpiring, the Rights will expire at the close of business on November 2,
2003.

The Rights have certain anti-takeover effects and, therefore, will cause
substantial dilution to a person or group who attempts to acquire the Company
on terms not approved by the Company's Board of Directors or who acquires 15%
or more of the outstanding common stock without approval of the Company's Board
of Directors. The Rights should not interfere with any merger or other business
combination approved by the Board since they may be redeemed by the Company at
$.01 per Right at any time until the close of business on the tenth day after a
person or group has obtained beneficial ownership of 15% or more of the
outstanding common stock or until a person commences or announces an intention
to commence a tender offer for 30% or more of the outstanding common stock.

NOTE 10--STOCK OPTIONS

The Company currently has two stock option plans, the 1993 Stock Option
Plan (1993 Plan) and the Non-Qualified Stock Option Plan (NQSOP). In March
1996, shareholders of the Company approved an increase in the number of shares
issuable pursuant to the 1993 Plan by 251,178 shares. A third plan, the
Combined Stock Option Plan expired in February 1993 and was replaced by the
1993 Plan. In September 1996, the Board of Directors reserved 70,180 shares for
the issuance of non-qualified stock options in conjunction with the purchase of
Trilectron. Under the terms of the plans, a total of 1,634,558 shares of the
Company's stock are reserved for issuance to directors, officers and key
employees as of October 31, 1996. Options issued under the 1993 Plan may be
designated incentive stock options (ISO) or non-qualified stock options (NQSO).
ISOs are granted at not less than 100% of the fair market value at the date of
grant (110% thereof in certain cases) and are exercisable in percentages
specified at date of grant over a period up to ten years. Only employees are
eligible to receive ISOs. NQSOs may be granted at less than fair market value
and may be immediately exercisable. Options granted under the NQSOP may be
granted to directors, officers and employees at no less than the fair market
value at the date of grant and are generally exercisable in four equal annual
installments commencing one year from date of grant.

F-25

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 10--STOCK OPTIONS--(CONTINUED)

Information concerning all of the stock option transactions for the three
years ended October 31, 1996 follows:

All of the above options were granted at the fair market value of the
stock on the date of grant. As of October 31, 1996, options for 1,280,429
shares were exercisable at a weighted average option price of $6.05. If there
were a change in control of the Company, options for an additional 228,898
shares would become immediately exercisable. The weighted average option price
for all options outstanding as of October 31, 1996 is $6.86. All stock option
share and price per share information has been retroactively restated for stock
dividends and splits.

NOTE 11--RETIREMENT PLANS

The Company has a qualified defined contribution retirement plan (the
Plan) under which eligible employees of the Company and its participating
subsidiaries may contribute up to 10% of their annual compensation, as defined,
and the Company will contribute specified percentages ranging from 25% to 50%
of employee contributions up to 3% of annual pay in Company stock or cash, as
determined by the Company. The Plan also provides that the Company may
contribute additional amounts in its common stock or cash at the discretion of
the Board of Directors.

In September 1992, the Company sold 658,845 shares of the Company's stock
to the Plan for an aggregate price of $4,122,000 entirely financed through a
promissory note with the Company. The promissory note is payable in nine equal
annual installments, inclusive of principal and interest at the rate of 8% per
annum, of $655,000 each and a final installment of $640,000 and is prepayable
in full or in

F-26

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 11--RETIREMENT PLANS--(CONTINUED)

part without penalty at any time. Prior to September 1992, the Company sold an
aggregate of 452,429 shares of its stock to the Plan in exchange for two notes
receivable, which have been fully satisfied.

Participants receive 100% vesting in employee contributions. Vesting in
Company contributions is based on number of years of service. Contributions to
the Plan charged to income from continuing operations for fiscal 1994, 1995 and
1996 totaled $206,000, $240,000 and $364,000, respectively, net of interest
income earned on the note received from the Plan of $331,000 in fiscal 1994,
$299,000 in fiscal 1995 and $272,000 in fiscal 1996.

In 1991, the Company established a Directors Retirement Plan covering its
then current directors. The net assets of this plan as of October 31, 1996 are
not material to the financial position of the Company. During fiscal 1994, 1995
and 1996, $73,000, $75,000 and $82,000 respectively, was expensed for this
plan.

Due to changes in the average number of common shares outstanding, net
income per share for the full fiscal year does not equal the sum of the four
individual quarters.

The amounts above differ from those previously reported on Forms 10-Q
because these amounts have been restated to reflect the results of the
Company's health care operations as discontinued operations for all periods
presented.

F-27

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

Export sales were $3,678,000 in fiscal 1994, $5,762,000 in fiscal 1995 and
$9,806,000 in fiscal 1996.

No one customer accounted for sales of 10% or more of consolidated sales
during the last three fiscal years.

RESEARCH AND DEVELOPMENT EXPENSES

Fiscal 1994, 1995 and 1996 cost of sales amounts include approximately
$1,200,000, $1,800,000 and $2,400,000, respectively, of new product research
and development expenses.

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION ARE AS FOLLOWS:

Cash paid for interest was $193,000, $386,000 and $264,000 in 1994, 1995
and 1996, respectively. Cash paid for income taxes was $881,000, $1,400,000 and
$4,421,000 in 1994, 1995 and 1996, respectively.

Non-cash investing and financing activities related to the acquisitions
and contingent note payments during fiscal 1994, 1995 and 1996 were as follows:

Non-cash investing and financing activities related to purchases of
property, plant and equipment financed by capital leases during fiscal 1994,
1995 and 1996 amounted to $1,044,000, $2,257,000 and $1,343,000, respectively.
Non-cash investing and financing activities during fiscal 1995 also included
purchases of property, plant and equipment of $2,269,000, investments in and
advances to unconsolidated partnerships of $862,000, deferred charges of
$461,000 and other assets of $139,000

F-29

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

which were financed by capital leases assumed, issuance of a note payable and
distributions from an unconsolidated partnership during fiscal 1995.
Additionally, retained earnings was charged $7,881,000 in fiscal 1995 and
$20,963,000 in fiscal 1996 as a result of the 10% stock dividends described in
Note 4 above.

NOTE 14--PENDING LITIGATION

In November 1989, HEICO Aerospace and Jet Avion were named defendants in a
complaint filed by United Technologies Corporation ("UTC") in the United States
District court for the Southern District of Florida. The complaint, as amended
in fiscal 1995, alleges infringement of a patent, misappropriation of trade
secrets and unfair competition relating to certain jet engine parts and
coatings sold by Jet Avion in competition with Pratt & Whitney, a division of
UTC. UTC seeks approximately $10 million in damages for the patent infringement
and approximately $30 million in damages for the misappropriation of trade
secrets and the unfair competition claims. The aggregate damages referred to in
the preceding sentence do not exceed approximately $30 million because a
portion of the misappropriation and unfair competition damages duplicate the
$10 million patent infringement damages. The complaint also seeks, among other
things, pre-judgment interest and treble damages.

In July and November 1995, the Company filed its answers to UTC's
complaint denying the allegations. In addition, the Company filed counterclaims
against UTC for, among other things, malicious prosecution, trade
disparagement, tortious interference, unfair competition and antitrust
violations. The Company is seeking treble, compensatory and punitive damages in
amounts to be determined at trial. UTC filed its answer denying certain
counterclaims and moved to dismiss other counterclaims. A number of motions are
currently pending and no trial date has been set.

Based on currently known facts, the Company's legal counsel has advised
that it believes that the Company should be able to successfully defend the
patent infringement claims alleged in UTC's complaint. With respect to the
misappropriation and unfair competition claims, legal counsel to the Company
has advised that it believes the likelihood that UTC will be able to prove a
case regarding such claims within the statute of limitations is remote.
Further, the Company intends to vigorously pursue its counterclaims against
UTC. The ultimate outcome of this litigation is not certain at this time and no
provision for gain or loss, if any, has been made in the accompanying
consolidated financial statements.

The Company is involved in various other legal actions arising in the
normal course of business. After taking into consideration legal counsel's
evaluation of such actions, management is of the opinion that the outcome of
these other matters will not have a significant effect on the Company's
consolidated financial statements.

NOTE 15--SUBSEQUENT EVENT--PENDING LITIGATION

On August 25, 1997, a Motion for Summary Judgment filed by the Company on
a portion of the lawsuit described in Note 14 was granted by the United States
District Court Judge. The Summary Judgment dismissed UTC's claims for
misappropriation of trade secrets and unfair competition, finding that
Florida's statute of limitations bars such claims. The ruling left pending
UTC's claim alleging

F-30

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED OCTOBER 31, 1994, 1995 AND 1996--(CONTINUED)

NOTE 15--SUBSEQUENT EVENT--PENDING LITIGATION--(CONTINUED)

infringement of a patent that expired in 1992 and the Company's counterclaims
against UTC alleging, among other things, malicious prosecution, trade
disparagement, tortious interference, unfair competition and antitrust
violations. On September 9, 1997, UTC served its Motion for Reconsideration of
the Court's Motion for Summary Judgment, which is currently pending, and
accordingly, the Company filed its response opposing such motion.

Based on currently known facts, the Company's legal counsel has advised
that it believes that the Company should be able to successfully defend the
patent infringement claims alleged in UTC's complaint. With respect to the
misappropriation and unfair competition claims, legal counsel to the Company
has advised that it believes that the likelihood of success of UTC's Motion for
Reconsideration is remote. Further, the Company intends to vigorously pursue
its counterclaims against UTC. The ultimate outcome of this litigation is not
certain at this time and no provision for gain or loss, if any, has been made
in the consoldiated financial statements.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--UNAUDITED
FOR THE NINE MONTHS ENDED JULY 31, 1996 AND 1997

1. The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes normally included in
annual consolidated financial statements and should be read in conjunction with
the financial statements and notes thereto included in the Company's latest
Annual Report on Form 10-K for the year ended October 31, 1996. In the opinion
of management, the unaudited consolidated condensed financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation of the consolidated condensed balance sheets
and consolidated condensed statements of operations and cash flows for such
interim periods presented. The results of operations for the nine months ended
July 31, 1997 are not necessarily indicative of the results which may be
expected for the entire fiscal year.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--UNAUDITED
FOR THE NINE MONTHS ENDED JULY 31, 1996 AND 1997--(CONTINUED)

The industrial development revenue bonds represent bonds issued by Broward
County, Florida in 1996 (Series 1996 bonds) and in 1988 (Series 1988 bonds),
and bonds issued by Manatee County, Florida in 1997 (Series 1997A and Series
1997B Bonds).

The Series 1997A and 1997B bonds were issued in the amounts of $3,000,000
and $1,000,000, respectively, for the purpose of constructing and purchasing
equipment for a new facility in Palmetto, Florida. As of July 31, 1997, the
Company has been reimbursed $80,000 for such expenditures, and the balance of
the unexpended bond proceeds of $3,985,000, including investment earnings, is
held by the trustee and is available for future qualified expenditures. The
Series 1997A and 1997B bonds are due March 2017 and bear interest at variable
rates calculated weekly (3.75% and 5.60%, respectively, at July 31, 1997). The
1997A and 1997B bonds are secured by a letter of credit expiring in March 2004
and a mortgage on the related properties pledged as collateral. The letter of
credit requires annual sinking fund payments of $200,000 beginning in March
1998.

The Series 1996 and Series 1988 bonds bear interest as of July 31, 1997,
at 3.80% and 3.70%, respectively.

As of July 31, 1997, unexpended proceeds of the Series 1996 bonds of
$1,376,000 are held by the trustee and are available for future qualified
expenditures.

In February 1997, the Company's equipment loan facility was extended
through December 1997. In addition, the amendment, among other things,
increased the amount of available funds to $2,000,000. Equipment loans bear
interest at rates ranging from 8.50% to 9.00% as of July 31, 1997.

4. The fiscal 1996 net income from discontinued operations represents the
Company's former subsidiary, MediTek Health Corporation, which was sold in the
third quarter of fiscal 1996 at a gain of $5,264,000.

5. Net income per share is calculated on the basis of the weighted average
number of common shares outstanding during each period plus common share
equivalents arising from the assumed exercise of stock options, if dilutive,
and has been adjusted for the effect of any stock dividends and stock splits.

6. Supplemental disclosures of cash flow information for the nine months
ended July 31, 1997 and 1996 are as follows: Cash paid for interest was
$319,000 and $129,000 in fiscal 1997 and 1996, respectively.

Cash paid for income taxes was $3,013,000 and $1,228,000 in fiscal 1997
and 1996, respectively.

7. With respect to the litigation referenced in Note 14 to the
Consolidated Financial Statements included in the Company's Annual Report on
Form 10-K for the year ended October 31, 1996, a Motion for Summary Judgment
filed by the Company on a portion of the lawsuit was granted by the United
States District Court Judge in August 1997. The Summary Judgment dismissed
UTC's claims for misappropriation of trade secrets and unfair competition,
finding that Florida's statute of limitations bars such claims. The ruling left
pending UTC's claim alleging infringement of a patent that expired in 1992 and
the Company's counterclaims against UTC alleging, among other things, malicious
prosecution, trade disparagement, tortious interference, unfair competition and
antitrust violations. On

F-36

HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--UNAUDITED
FOR THE NINE MONTHS ENDED JULY 31, 1996 AND 1997--(CONTINUED)

September 9, 1997, UTC served its Motion for Reconsideration of the Court's
Motion for Summary Judgment, which is currently pending, and accordingly, the
Company filed its response opposing such motion.

Based on currently known facts, the Company's legal counsel has advised
that it believes that the Company should be able to successfully defend the
patent infringement claims alleged in UTC's complaint. With respect to the
misappropriation and unfair competition claims, legal counsel to the Company
has advised that it believes the likelihood of success of UTC's Motion for
Reconsideration is remote. Further, the Company intends to vigorously pursue
its counterclaims against UTC. The ultimate outcome of this litigation is not
certain at this time and no provision for gain or loss, if any, has been made
in the consolidated financial statements.

There have been no other material developments in previously reported
litigation involving the Company and its subsidiaries.

8. In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS No. 123). SFAS No. 123 established a fair value
based method of accounting for stock options. Entities may elect to either
adopt the measurement criteria of the statement for accounting purposes,
thereby recognizing an amount in results of operations on a prospective basis,
or disclose the pro forma effects of the new measurement criteria in Notes to
Consolidated Financial Statements. The Company intends to adopt the pro forma
disclosure features of SFAS No. 123, which are effective for fiscal year 1997.

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share." SFAS
No. 128, which supersedes Accounting Principles Board ("APB") Opinion No. 15,
requires a dual presentation of basic and diluted earnings per share on the
face of the income statement. Basic earnings per share excludes dilution and is
computed by dividing income or loss attributable to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. Diluted earnings per share is computed similarly
to fully diluted earnings per share under APB Opinion No. 15. SFAS No. 128 is
effective for financial statements issued for periods ending after December 15,
1997, including interim periods; earlier application is not permitted. Had SFAS
No. 128 been adopted for the nine months ended July 31, 1996 and 1997, basic
and diluted earnings per share would have been:

In March 1997, the FASB issued Statement of Financial Accounting Standards
No. 129, "Disclosure of Information About Capital Structure" (SFAS No. 129).
SFAS No. 129 is effective for interim and annual periods ending after December
15, 1997. The Company believes SFAS No. 129 will have little, if any, effect on
the information already disclosed in the Company's consolidated financial
statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes standards for
the way that public companies report selected information about operating
segments in annual financial statements and requires that those companies
report selected information about segments in interim financial reports issued
to shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. SFAS No. 131 is
effective for financial statements for the periods beginning after December 15,
1997. The Company has not determined the effects, if any, SFAS No. 131 will
have on the disclosures in its consolidated financial statements.

F-38

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.

All amounts except the Securities and Exchange Commission registration fee
are estimated.
* To be filed by amendment.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided in such statute. The Registrant's Articles of Incorporation provide
that the Registrant may indemnify its executive officers and directors to the
fullest extent permitted by law wither now or hereafter. The Registrant has
entered or will enter into an agreement with each of its directors and certain
of its officers wherein it has agreed to indemnify each of them to the fullest
extent permitted by law.

The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition,
each director will continue to be subject to liability for (a) violations of
the criminal law, unless the director had reasonable cause to believe his
conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (b) deriving an improper personal benefit from a transaction; (c)
voting for or assenting to an unlawful distribution; and (d) willful misconduct
or a conscious disregard for the best interests of the Registrant in a
proceeding by or in the right of the Registrant to procure a judgment in its
favor or in a proceeding by or in the right of a shareholder. The statute does
not affect a director's responsibilities under any other law, such as the
federal securities laws or state or federal environmental laws.

ITEM 16. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
-------- ---------------------------------------------------------------------------------------
1 Form of Underwriting Agreement between HEICO and the Underwriters.**
2.1 Amended and Restated Agreement of Merger and Plan of Reorganization, dated as of
March 22, 1993, by and among HEICO Corporation, HEICO Industries, Corp. and New
HEICO, Inc. is incorporated by reference to Exhibit 2.1 to the Company's Registration
Statement on Form S-4 (Registration No. 33-57624) Amendment No. 1 filed on March 19,
1993.*

II-1

EXHIBIT
NUMBER DESCRIPTION
-------- -------------------------------------------------------------------------------------------------
2.2 Stock Purchase Agreement, dated June 20, 1996, by and among HEICO Corporation,
MediTek Health Corporation and U.S. Diagnostic Inc. is incorporated by reference to
Exhibit 2 to the Form 8-K dated July 11, 1996.*
2.3 Stock Purchase Agreement, dated as of September 16, 1996, by and between HEICO
Corporation and Sigmund Borax is incorporated by reference to Exhibit 2 to the Form 8-K
dated September 16, 1996.*
3.1 Articles of Incorporation of the Registrant are incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-4 (Registration No. 33-57624) Amendment
No. 1 filed on March 19, 1993.*
3.2 Articles of Amendment of the Articles of Incorporation of the Registrant, dated April 27,
1993, are incorporated by reference to Exhibit 3.2 to the Company's Registration Statement
on Form 8-B dated April 29, 1993.*
3.3 Articles of Amendment of the Articles of Incorporation of the Registrant, dated November 3,
1993, are incorporated by reference to Exhibit 3.3 to the Form 10-K for the year ended
October 31, 1993.*
3.4 Bylaws of the Registrant.*
4.0 The description and terms of Preferred Stock Purchase Rights are set forth in a Rights
Agreement between the Company and SunBank, N.A., as Rights Agent, dated as of
November 2, 1993, incorporated by reference to Exhibit 1 to the Form 8-K dated
November 2, 1993.*
4.2 Form of Indenture, dated as of , 1997, with respect to HEICO's % Convertible
Subordinated Notes due 2004.**
5.1 Opinion of Greenberg Traurig Hoffman Rosen Lipoff & Quentel, P.A. as to the validity of
the Notes and the Common Stock issuable upon conversion of the Notes being registered.***
10.1 Loan Agreement, dated March 1, 1988, between HEICO Corporation and Broward County,
Florida is incorporated by reference to Exhibit 10.1 to the Form 10-K for the year ended
October 31, 1994.*
10.2 SunBank Reimbursement Agreement, dated February 28, 1994, between HEICO Aerospace
Corporation and SunBank/South Florida, N.A. is incorporated by reference to Exhibit 10.2 to
the Form 10-K for the year ended October 31, 1994.*
10.3 Amendment, dated March 1, 1995, to the SunBank Reimbursement Agreement dated
February 28, 1994 between HEICO Aerospace Corporation and SunBank/South Florida,
N.A. is incorporated by reference to Exhibit 10.3 to the Form 10-K from the year ended
October 31, 1995.*
10.4 Loan Agreement, dated February 28, 1994, between HEICO Corporation and SunBank/
South Florida, N.A. is incorporated by reference to Exhibit 10.3 to the Form 10-K for the
year ended October 31, 1994.*
10.5 The First Amendment, dated October 13, 1994, to Loan Agreement dated February 28, 1994
between HEICO Corporation and SunBank/South Florida, N.A. is incorporated by reference
to Exhibit 10.4 to the Form 10-K for the year ended October 31, 1994.*
10.6 Second Amendment, dated March 1, 1995, to the Loan Agreement dated February 28, 1994
between HEICO Corporation and SunBank/South Florida, N.A. is incorporated by reference
to Exhibit 10.6 to the Form 10-K for the year ended October 31, 1995.*
10.7 Third Amendment, dated September 16, 1997, to Loan Agreement dated February 28, 1994
between Heico Corporation and SunTrust Bank, South Florida, National Association.***
10.8 Loan Agreement, dated March 31, 1994, between HEICO Corporation and Eagle National
Bank of Miami is incorporated by reference to Exhibit 10.5 to the Form 10-K for the year
ended October 31, 1994.*
10.9 The First Amendment, dated May 31, 1994, to Loan Agreement dated March 31, 1994
between HEICO Corporation and Eagle National Bank of Miami is incorporated by
reference to Exhibit 10.6 to the Form 10-K for the year ended October 31, 1994.*

II-2

EXHIBIT
NUMBER DESCRIPTION
-------- ----------------------------------------------------------------------------------------------
10.10 The Second Amendment, dated August 9, 1995, to the Loan Agreement dated March 31,
1994 between HEICO Corporation and Eagle National Bank of Miami is incorporated by
reference to Exhibit 10.9 to the Form 10-K for the year ended October 31, 1995.*
10.11 Second Loan Modification Agreement, dated February 27, 1997, between HEICO
Corporation and Eagle National Bank of Miami is incorporated by reference to Exhibit 10.3
to the Form 10-Q for the three months ended April 30, 1997.*
10.12 Loan Agreement, dated October 1, 1996, between HEICO Aerospace Corporation and
Broward County, Florida.*
10.13 SunTrust Bank Reimbursement Agreement, dated October 1, 1996, between HEICO
Aerospace Corporation and SunTrust Bank, South Florida, N.A.*
10.14 HEICO Savings and Investment Plan and Trust, as amended and restated effective January 2,
1987 is incorporated by reference to Exhibit 10.2 to the Form 10-K for the year ended
October 31, 1987.*
10.15 HEICO Savings and Investment Plan, as amended and restated December 19, 1994, is
incorporated by reference to Exhibit 10.11 to the Form 10-K for the year ended October 31,
1994.*
10.16 HEICO Corporation 1993 Stock Option Plan.*
10.17 HEICO Corporation Combined Stock Option Plan, dated March 15, 1988, is incorporated by
reference to Exhibit 10.3 to the Form 10-K for the year ended October 31, 1989.*
10.18 Non-Qualified Stock Option Agreement for Directors, Officers and Employees is
incorporated by reference to Exhibit 10.8 to the Form 10-K for the year ended October 31,
1985.*
10.19 HEICO Corporation Directors' Retirement Plan, as amended, dated as of May 31, 1991, is
incorporated by reference to Exhibit 10.19 to the Form 10-K for the year ended October 31,
1992.*
10.20 Key Employee Termination Agreement, dated as of April 5, 1988, between HEICO
Corporation and Thomas S. Irwin is incorporated by reference to Exhibit 10.20 to the Form
10-K for the year ended October 31, 1992.*
10.21 Employment and Non-compete Agreement, dated as of September 16, 1996, by and between
HEICO Corporation and Sigmund Borax is incorporated by reference to Exhibit 10.1 to the
Form 8-K dated September 16, 1996.*
10.22 Employment and Non-compete Agreement, dated as of September 16, 1996, by and between
HEICO Corporation and Charles Kott is incorporated by reference to Exhibit 10.2 to the
Form 8-K dated September 16, 1996.*
10.23 Loan Agreement, dated as of March 1, 1997, between Trilectron Industries, Inc. and Manatee
County, Florida is incorporated by reference to Exhibit 10.1 to the Form 10-Q for the three
months ended April 30, 1997.*
10.24 Letter of Credit and Reimbursement Agreement, dated as of March 1, 1997, between
Trilectron Industries, Inc., and First Union National Bank of Florida (excluding referenced
exhibits) is incorporated by reference to Exhibit 10.2 to the Form 10-Q for the three months
ended April 30, 1997.*
10.25 Stock Purchase Agreement dated July 25, 1997, among HEICO Corporation, N.A.C.
Acquisition Corporation, Northwings Accessories Corporation, Ramon Portela and Otto
Neuman (without schedules) is incorporated by reference to Exhibit 2 to Form 8-K dated
September 16, 1996.*
10.26 Registration Rights Agreement, dated September 15, 1997, by and between HEICO
Corporation and Ramon Portela is incorporated by reference to Exhibit 10.1 to Form 8-K
dated September 16, 1996.*
10.27 Employment and Non-compete Agreement dated September 16, 1997, by and between
Northwings Accessories Corporation and Ramon Portela is incorporated by reference to
Exhibit 10.2 to Form 8-K dated September 16, 1996.*

II-3

EXHIBIT
NUMBER DESCRIPTION
-------- -------------------------------------------------------------------------------------------
10.28 Amendment to Registration and Sale Rights Agreement, dated as of December 4, 1996, by
and among U.S. Diagnostic Inc. and Heico Corporation is incorporated by reference to
Exhibit 10.22 to Form 10-K for the year ended October 31, 1996.*
10.29 Assignment of Promissory Note by and between HEICO Corporation and Forum Capital
Markets L.P. is incorporated by reference to Exhibit 10.3 to Form 8-K dated September 16,
1997.*
10.30 Amendment to 6 1/2% Convertible Note, dated as of December 24, 1996, by and among U.S.
Diagnostic Inc. and HEICO Corporation.*
10.31 Second Amendment to the 6 1/2% Convertible Note, dated September 10, 1997, by and
among U.S. Diagnostic Inc., and HEICO Corporation is incorporated by reference to
Exhibit 10.4 to Form 8-K dated September 16, 1997.*
10.32 Stock Purchase Agreement, dated October 30, 1997, by and among HEICO Corporation,
HEICO Aerospace Holdings Corp. and Lufthansa Technik AG.**
10.33 Shareholders Agreement, dated October 30, 1997, by and between HEICO Aerospace
Holdings Corp., HEICO Aerospace Corporation and all of the shareholders of HEICO
Aerospace Holdings Corp. and Lufthansa Technik AG.**
12 Ratio of Earnings to Fixed Charges**
21 Subsidiaries of the Company.**
23.1 Consent of Greenberg Traurig Hoffman Rosen Lipoff & Quentel, P.A. (to be included in its
opinion to be filed as Exhibit 5.1).***
23.2 Consent of Deloitte & Touche LLP.**
23.3 Consent of De La Osa & Associates, P.A.**
23.4 Consent of Kerkering, Barberio & Co.**
27 Financial Data Schedule**

* Previously filed.
** Filed herewith.
*** To be filed by amendment.

ITEM 17. UNDERTAKINGS.

(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(b) The undersigned Registrant hereby undertakes: (a) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; (b) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering

II-4

thereof, and (c) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida, on November 5, 1997.

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Laurans A. Mendelson his true and lawful
attorney-in-fact, with full powers of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and
all amendments, including any post-effective amendments, to this Registration
Statement, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact or his substitutes may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Heico Corporation, a Florida corporation (the "Company"),
confirms its agreement with Forum Capital Markets L.P. and __________________
(the "Underwriters," which term shall also include any underwriter substituted
as hereinafter provided in Section 11 hereof), with respect to the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of $__________ aggregate principal amount of the Company's _% Convertible
Subordinated Notes due 2004 (the "Notes") to be issued pursuant to the
provisions of an indenture (the "Indenture") between the Company and
_________________, as trustee (the "Trustee") in substantially the form filed as
an exhibit to the Registration Statement (as defined below). Such $__________
aggregate principal amount of Notes are hereafter referred to as the "Firm
Notes." Upon the request of the Underwriters, as provided in Section 2(b)
hereof, the Company shall also issue and sell to the Underwriters, acting
severally and not jointly, up to an additional $___________ aggregate principal
amount of Notes for the purpose of covering over-allotments, if any. Such
$__________ aggregate principal amount of Notes are hereinafter referred to as
the "Option Notes," and together with the Firm Notes are hereinafter referred to
as the "Notes." The shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), issuable upon conversion of the Notes are
hereinafter referred to as the "Underlying Stock." The Notes and the Underlying
Stock are referred to herein as the "Securities." The Company hereby confirms
its agreement with the Underwriters with respect to the sale by the Company and
the purchase by the Underwriters of the Notes, as set forth herein.

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriters as of the date
hereof, and as of the Closing Date (as defined in Section 2(c) hereof) and each
Option Closing Date (as defined in Section 2(b)

hereof), if any, as follows:

(a) The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") a registration
statement, and an amendment or amendments thereto, on Form S-3, No.
_________, including the related preliminary prospectus dated _______,
1997 and any subsequent preliminary prospectus ("Preliminary
Prospectus"), for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), which
registration statement and amendment or amendments have been prepared
by the Company in conformity with the requirements of the Securities
Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission under the
Securities Act (the "Regulations") and the rules and regulations under
the Trust Indenture Act. The Company has complied with the conditions
for the use of Form S-3. Except as the context may otherwise require,
said registration statement, as amended, on file with the Commission at
the time said registration statement becomes effective (including the
prospectus, financial statements, schedules, exhibits and all other
documents filed as a part thereof or incorporated therein (including,
but not limited to those documents or information incorporated by
reference therein) and all information deemed to be a part thereof as
of such time pursuant to paragraph (b) of Rule 430(A) of the
Regulations is hereinafter called the "Registration Statement," and the
form of prospectus in the form first filed with the Commission pursuant
to Rule 424(b) of the Regulations or, if no filing pursuant to Rule
424(b) is made, such form of prospectus included in the Registration
Statement, together with any documents thereafter incorporated by
reference therein, is hereinafter called the "Prospectus." If the
Company files an abbreviated registration statement to register
additional Securities and relies upon Rule 462(b) under the Securities
Act for such registration statement to become effective upon filing
with the Commission (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be deemed
to refer to both the registration statement referred to above and the
Rule 462 Registration Statement. For purposes hereof, "Rules and
Regulations" means the rules and regulations adopted by the Commission
under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the Trust Indenture Act, as applicable.

(b) Neither the Commission nor any state regulatory
authority has issued any order preventing or suspending the use of any
Preliminary Prospectus, the Registration Statement or the Prospectus or
any part of any thereof or the qualification of the Trustee, and no
proceedings for a stop order suspending the effectiveness of the
Registration Statement, any of the Company's securities or the
qualification of the Trustee have been instituted or are pending or, to
the knowledge of the Company, threatened. Each of any Preliminary
Prospectus, the Registration Statement and the Prospectus at the time
of filing thereof with the Commission, conformed with the requirements
of the Securities Act, the Trust Indenture Act and the Rules and
Regulations in all material respects, none of any Preliminary
Prospectus, the Registration Statement or the

Prospectus at the time of filing thereof contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
that this representation and warranty does not apply to statements made
in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Underwriters expressly for use in
any such Preliminary Prospectus, Registration Statement or Prospectus.
When the Registration Statement or any amendment thereto was or is
declared effective, the Closing Date and each Option Closing Date, if
any, the Registration Statement and the Prospectus will conform to the
requirements of the Securities Act, the Trust Indenture Act and the
Rules and Regulations. At all times subsequent to the effective date of
the Registration Statement through the last to occur of the Closing
Date, the last Option Closing Date, if any, or the last date the
Prospectus may be required to be delivered in connection with sales by
the Underwriters or a dealer, the Registration Statement and the
Prospectus will conform to the requirements of the Securities Act, the
Trust Indenture Act and the Rules and Regulations. Neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, as of such respective dates, with respect to the
Registration Statement, or during such respective periods, with respect
to the Prospectus, will contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty does not apply to
statements made in reliance upon and in conformity with written
information furnished to the Company with respect to the Underwriters
by or on behalf of the Underwriters expressly for use in such
Registration Statement or Prospectus. The Company acknowledges that the
only such written information is that contained under the caption
"Underwriting" in the Preliminary Prospectus, the Prospectus and the
Registration Statement and the stabilization legend set forth in the
forepart of the Preliminary Prospectus, the Prospectus and the
Registration Statement.

(c) The Company is subject to Section 13 or 15(d) of
the Exchange Act. The documents incorporated by reference into the
Registration Statement (the "Incorporated Documents"), when they were
filed with the Commission (or, if any amendment with respect to any
such document was filed, when such amendment was filed), complied, or
at the time they hereafter are filed with the Commission will comply,
in all material respects with the requirements of the Exchange Act and
the regulations thereunder and, when read together with the other
information in the Prospectus, at the time the Registration Statement
and any amendments thereto become or became effective, at the Closing
or any Option Closing did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. Any Incorporated Documents filed subsequent to the date of
the Prospectus shall, when filed with the Commission, conform in all
respect to the requirements of the Exchange Act and the Rules and
Regulations, as applicable.

- 3 -

(d) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report
on Form 10-K which is incorporated by reference into the Registration
Statement. The Company and each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation. The Company
and each of the Subsidiaries is duly qualified and licensed and in good
standing as a foreign corporation in each jurisdiction in which its
ownership or leasing of any properties or the character of its
operations require such qualification or licensing, except where the
failure to be so qualified or licensed would not have a material
adverse effect on the condition, financial or otherwise, results of
operations, business or prospects of the Company and the Subsidiaries,
taken as a whole (a "Material Adverse Effect"). The Company does not
own or control, directly or indirectly, any corporation, partnership,
limited liability company, association or other entity other than the
Subsidiaries. None of the Subsidiaries owns more than 10 % of or
controls, directly or indirectly, any corporation, partnership, limited
liability company, association or other entity other than
________________________________. The Company owns, either directly or
through other Subsidiaries, all of the outstanding capital stock of
each Subsidiary free and clear of all liens, charges, claims,
encumbrances, pledges, security interests defects or other restrictions
or equities of any kind whatsoever; and all outstanding capital stock
of the Subsidiaries has been duly authorized and validly issued and is
fully paid and non-assessable and not issued in violation of any
preemptive rights or applicable securities laws. Each of the Company
and the Subsidiaries has all requisite power and authority (corporate
and other), and has obtained any and all necessary authorizations,
approvals, orders, licenses, certificates, franchises and permits
(collectively "Approvals") of and from all governmental or regulatory
officials and bodies, to own or lease its properties and conduct its
business as described in the Prospectus except for Approvals which if
not so obtained would not have a Material Adverse Effect; each of the
Company and the Subsidiaries is and has been doing business in
compliance with all such Approvals and all federal, foreign, state and
local laws, rules and regulations, except for such failures to comply
as would not have a Material Adverse Effect; and neither the Company
nor any of the Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Approval. The
jurisdictions of incorporation and qualification or licensing of the
Company and the Subsidiaries are identified on Annex A hereto.

(e) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus under the
caption "Capitalization," and will have the adjusted capitalization set
forth therein on the Closing Date and each Option Closing Date, if any,
based upon the assumptions set forth therein (except as a result of the
issuance of shares of Common Stock identified as reserved in the
footnotes to such table pursuant to the plans described therein or the
options described therein). Neither the Company nor any of the
Subsidiaries is a party to or bound by any instrument, agreement or
other arrangement, including, but not limited to, any voting trust
agreement, stockholders' agreement or other agreement or instrument,
affecting the securities or

- 4 -

rights or obligations of securityholders of the Company or providing
for it to issue, sell, transfer or acquire any capital stock, rights,
warrants, options or other securities of the Company, except for this
Agreement and the Indenture and as set forth in the Registration
Statement. The Securities and all other securities issued or issuable
by the Company and the Subsidiaries conform, or, when issued and paid
for, will conform in all material respects to all statements with
respect thereto contained in the Prospectus. All issued and outstanding
securities of the Company and the Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable;
the holders thereof have no rights of rescission with respect thereto
and are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the
preemptive rights of any securityholder of the Company or any of the
Subsidiaries or similar contractual rights granted by the Company or
any of the Subsidiaries. The Notes will be issued pursuant to the terms
and conditions of the Indenture, and the Indenture will conform in all
material respects to the description thereof contained in the
Registration Statement. At the Closing Date, the Indenture will conform
to the requirements of the Trust Indenture Act and the Rules and
Regulations applicable to an indenture which is qualified thereunder.
The Notes have been duly authorized and, when validly authenticated,
issued, delivered and paid for in the manner contemplated by the
Indenture, will be duly authorized, validly issued and outstanding
obligations of the Company entitled to the benefits of the Indenture.
The Underlying Stock issuable upon conversion of the Notes will, upon
such issuance, be duly authorized, validly issued, fully paid and
nonassessable, and the Company has duly authorized and reserved for
issuance upon conversion of the Notes, the Underlying Stock issuable
upon such conversion. The Securities are not and will not be subject to
any preemptive or other similar rights of any securityholder of the
Company or any of the Subsidiaries; all corporate action required to be
taken for the authorization, issue and sale of the Securities has been
duly and validly taken; and the certificates representing the
Securities will be in due and proper form. No holder of any securities
of the Company has any right to require registration of shares of
Common Stock or other securities of the Company because of the filing
of the Registration Statement or the consummation of the transactions
contemplated hereby. Upon the issuance and delivery pursuant to the
terms of this Agreement and the Indenture of the Notes to be sold by
the Company hereunder and thereunder, the Underwriters will acquire
good and marketable title thereto free and clear of any lien, charge,
claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever

(f) The consolidated financial statements of the
Company and the Subsidiaries together with the related notes thereto
set forth in or incorporated by reference in the Registration
Statement, each Preliminary Prospectus and the Prospectus fairly
present the financial position, changes in stockholders' equity, cash
flow and results of operations of the Company and the Subsidiaries at
the respective dates and for the respective periods to which they
apply, and such historical financial statements have been prepared in
conformity with generally accepted accounting principles and the Rules
and Regulations, consistently applied throughout the periods involved;
there has been no

- 5 -

material adverse change or development involving a material prospective
change in the condition, financial or otherwise, or in the earnings,
business, prospects or results of operations of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, since the date of the financial statements included
in the Registration Statement and the Prospectus, and the outstanding
debt, the property, both tangible and intangible, and the businesses of
each of the Company and the Subsidiaries conform in all material
respects to the descriptions thereof contained in the Registration
Statement and the Prospectus. Financial information set forth in the
Prospectus under the headings "Summary Financial and Operating Data,"
"Selected Financial Data," "Capitalization" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" fairly presents, in all respects, on the basis stated in
the Prospectus, the information set forth therein and has been derived
from or compiled on a basis consistent with that of the audited
financial statements included in the Prospectus.

(g) Each of the Company and the Subsidiaries has
filed all material tax returns required to be filed by it in any
jurisdiction, other than those filings being contested in good faith,
and has paid all federal, state, local and foreign taxes shown to be
due on such returns or claimed to be due from such entities, other than
those (i) currently payable without penalty or interest or (ii) being
contested in good faith; and the Company has established adequate
reserves in its financial statements (in accordance with generally
accepted accounting principles) for such taxes which are not due and
payable and for any material tax deficiency or claims outstanding,
proposed or assessed against it.

(h) No transfer tax, stamp duty or other similar tax
is payable by or on behalf of the Underwriters in connection with (i)
the issuance by the Company of the Securities, (ii) the purchase by the
Underwriters of the Notes from the Company or (iii) the consummation by
the Company of any of its obligations under this Agreement or the
Indenture.

(i) Each of the Company and the Subsidiaries
maintains liability, casualty and other insurance (subject to customary
deductions and retentions) with responsible insurance companies against
such risks generally insured against by companies engaged in similar
businesses as the Company and the Subsidiaries. To the Company's
knowledge, neither the Company nor any of the Subsidiaries (A) has
failed to give notice or present any material insurance claim with
respect to any matter, including, but not limited to, the Company's or
any of the Subsidiaries' businesses, property or professional staff,
under any insurance policy or surety bond in a due and timely manner,
(B) has any material disputes or claims against any underwriter of such
insurance policies or surety bonds or has failed to pay any premiums
due and payable thereunder or (C) has failed to comply with all
conditions contained in such insurance policy and surety bonds wherein
such failure would have a Material Adverse Effect. There are no facts
or circumstances known to the Company which would have the effect under
any such insurance policy or surety bond of relieving any insurer of
its obligation to satisfy in all material respects any

- 6 -

valid claim of the Company or any of the Subsidiaries.

(j) There is no action, suit, proceeding,
arbitration, litigation or governmental proceeding pending or, to the
knowledge of the Company, threatened against (or circumstances that are
reasonably likely to give rise to the same), or involving the
properties or businesses of, the Company or any of the Subsidiaries
which (i) questions the validity of the capital stock of the Company or
any of the Subsidiaries or this Agreement or the Indenture or of any
action taken or to be taken by the Company or any of the Subsidiaries
pursuant to or in connection with this Agreement or the Indenture, or
(ii) could have a Material Adverse Effect which is not disclosed in the
Registration Statement or the Prospectus.

(k) The Company has full corporate right, power and
authority to authorize, issue, deliver and sell the Securities, to
enter into this Agreement and the Indenture and to consummate the
transactions provided for in such agreements. This Agreement has been
duly and properly authorized, executed and delivered by the Company.
This Agreement constitutes, and when the Company has duly executed and
delivered the Indenture, the Indenture (assuming the due execution and
delivery thereof by the Trustee) will constitute, a legal, valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity) and except to the extent that rights to
indemnification and contribution may be limited by federal or state
securities laws on public policy relating thereto. None of the
Company's issue and sale of the Securities, the execution or delivery
of this Agreement or the Indenture, its performance hereunder and
thereunder, its consummation of the transactions contemplated herein
and therein or the conduct by it and the Subsidiaries of their
businesses as described in the Registration Statement or any amendments
or supplements thereto conflicts or will conflict with or results or
will result in any breach or violation of any of the terms or
provisions of, or constitutes or will constitute a default under, or
results or will result in the creation or imposition of any lien,
charge, claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever upon any property or
assets of the Company or any of the Subsidiaries pursuant to the terms
of, (i) the certificate of incorporation or by-laws of the Company or
any of the Subsidiaries, (ii) any license, contract, indenture,
mortgage, deed of trust, voting trust agreement, stockholders'
agreement, note, loan or credit agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is a party
or by which it is or may be bound or to which its properties or assets
is or may be subject, or any indebtedness, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company
or any of the Subsidiaries of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body, having
jurisdiction over the Company or any of the Subsidiaries or any of
their respective

- 7 -

activities or properties except, in the case of clauses (ii) and (iii),
such conflict, breaches, defaults, creations, impositions and
violations that would not have a Material Adverse Effect.

(l) No consent, approval, authorization or order of,
and no filing with, any court, arbitrator, regulatory body, government
agency or other body, domestic or foreign, is required for the
execution, delivery or performance by the Company of this Agreement or
the Indenture or the transactions contemplated hereby or thereby,
except such as have been or may be obtained under the Securities Act or
the Exchange Act or may be required under state securities or Blue Sky
laws or the rules of the National Association of Securities Dealers,
Inc. (the "NASD") or with respect to the listing of the Notes on the
New York Stock Exchange in connection with the Underwriters' purchase
and distribution of the Notes.

(m) Subsequent to the respective dates as of which
information is set forth in the Prospectus and except as may otherwise
be indicated or contemplated herein or therein, unless the Company has
notified the Underwriters in writing otherwise, neither the Company nor
any of the Subsidiaries has (i) issued any securities or incurred any
material liability or obligation, direct or contingent, for borrowed
money not in the ordinary course of business, (ii) entered into any
material transaction other than in the ordinary course of business or
(iii) declared or paid any dividend, other than regular cash dividends,
or made any other distribution on or in respect of its capital stock of
any class, and there has not been any change in the capital stock from
the description thereof in the Registration Statement or any material
adverse change in or affecting the general affairs, management,
financial operations, stockholders' equity or results of operation of
the Company or any of the Subsidiaries.

(n) Neither the Company nor any of its Subsidiaries
(i) is in violation of its certificate of incorporation or by-laws, as
applicable, (ii) is in default in the performance of any obligation,
agreement or condition contained in any license, contract, indenture,
mortgage, installment sale agreement, lease, deed of trust, voting
trust agreement, stockholders' agreement, note, loan or credit
agreement, purchase order, agreement or instrument evidencing an
obligation for borrowed money or other material agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries may be bound or to which the
property or assets of the Company or any of the Subsidiaries is subject
or affected or (iii) is in violation in any respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject, except any violation or default
under the foregoing clause (ii) or (iii) as would not have a Material
Adverse Effect.

(o) The Company believes that each of the Company and
the Subsidiaries currently has a good employer/employee relationship
with its employees and each of the Company and the Subsidiaries is in
compliance with all federal, state, local and

- 8 -

foreign laws and regulations respecting employment and employment
practices, terms and conditions of employment and wages and hours,
except for such failures to comply as would not have a Material Adverse
Effect. There are no pending investigations involving the Company or
any of the Subsidiaries by the U.S. Department of Labor or, to the
Company's knowledge, any such investigations by any other governmental
agency responsible for the enforcement of such federal, state, local or
foreign laws and regulations that would be material to the Company or
such Subsidiary. There is no unfair labor practice charge or complaint
against the Company or any of the Subsidiaries pending before the
National Labor Relations Board or any strike, picketing, boycott,
dispute, slowdown or stoppage pending or threatened against or
involving the Company or any of the Subsidiaries. No representation
question exists respecting the employees of the Company or any of the
Subsidiaries, and no collective bargaining agreement or modification
thereof is currently being negotiated by the Company or any of the
Subsidiaries. No grievance or arbitration proceeding is pending or
threatened under any expired or existing collective bargaining
agreements of the Company or any of the Subsidiaries. No material labor
dispute with the employees of the Company or any of the Subsidiaries
exists or, to the best of the Company's knowledge, is imminent.

(p) No "employee pension benefit plan," "employee
welfare benefit plan" or "multi-employer plan" (ERISA Plans) as such
terms are defined in Sections 3(2), 3(1) and 3(37), respectively, of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained or sponsored by the Company or any of the
Subsidiaries (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), which could subject the Company or any of the Subsidiaries to
any tax penalty or civil penalty on prohibited transactions which has
not been adequately corrected and which might reasonably be expected to
have a Material Adverse Effect. No "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or any of the events set forth in
Section 4043(b) of ERISA (other than events with respect to which the
30-day notice under Section 4043 of ERISA has been waived) has occurred
with respect to any employee benefit plan which might reasonably be
expected to have a Material Adverse Effect. Each ERISA Plan is in
compliance with all reporting, disclosure and other requirements of the
Code and ERISA as they relate to such ERISA Plan, except for
noncompliance which could be reasonably expected to have a Material
Adverse Effect. Determination letters have been received from the
Internal Revenue Service with respect to each ERISA Plan which is
intended to comply with Code Section 401(a) stating that such ERISA
Plan and the attendant trust are qualified thereunder. Neither the
Company nor any of the Subsidiaries has ever completely or partially
withdrawn from a "multi-employer plan" as so defined.

(q) Neither the Company or any of the Subsidiaries,
nor any of its affiliates has taken or will take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result in, under the

- 9 -

Exchange Act or otherwise, stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities or otherwise.

(r) Each of the Company and the Subsidiaries owns or
has the right to use, free and clear of all liens, claims, charges,
encumbrances, pledges, security interests and other adverse interests
of any kind whatsoever, all patents, trademarks, service marks, trade
names, copyrights, technology, and all licenses and rights with respect
to the foregoing, used in the conduct of its business as now conducted
or proposed to be conducted without, to the knowledge of the Company,
infringing upon or otherwise acting adversely to the right or claimed
right of any person, corporation or other entity. The Company is not
aware of any infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.

(s) Each of the Company and the Subsidiaries has good
and marketable title to, or valid and enforceable leasehold estates in,
all items of real and personal property which are material to its
business, in each case, except as disclosed in the Prospectus, free and
clear of all liens, charges, claims, encumbrances, pledges, security
interests, defects and other restrictions that would have a Material
Adverse Effect.

(t) To the Company's knowledge, Deloitte & Touche LLP
is an independent certified public accountant of the Company as
required by the Securities Act and the Rules and Regulations.

(u) The Common Stock is listed on the American Stock
Exchange.

(v) Neither the Company or any of the Subsidiaries
nor any of their respective officers, directors, stockholders,
employees or agents nor any other person acting on behalf of the
Company or any of the Subsidiaries has, directly or indirectly, since
_________ given or agreed to give any money, gift or similar benefit
(other than legal price concessions to customers in the ordinary course
of business) to any customer, supplier, employee or agent of a customer
or supplier, or any official or employee of any governmental agency
(domestic or foreign), or any instrumentality of any government
(domestic or foreign), or any political party or candidate for office
(domestic or foreign), or any other person who was, is or may be in a
position to help or hinder the businesses of the Company or any of the
Subsidiaries (or assist the Company or any of the Subsidiaries in
connection with any actual or proposed transaction) which would be
reasonably likely to subject the Company or any of the Subsidiaries, or
any of such others to any material damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or
foreign). The Company believes that each of the Company's and the
Subsidiaries' internal accounting controls are sufficient to cause the
Company and the Subsidiaries to comply in all material respects with
the Foreign Corrupt Practices Securities Act of 1977, as amended.

- 10 -

(w) The minute books of the Company and each of the
Subsidiaries have been made available to the Underwriters, contain a
complete summary of all meetings and actions of the directors and
stockholders of each of the Company and the Subsidiaries since the time
of their respective incorporation and reflect all transactions referred
to in such minutes accurately in all respects.

(x) Neither the Company nor any of the Subsidiaries
has been notified or is otherwise aware that it is potentially liable,
or is considered potentially liable, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, or any similar law ("Environmental Laws"), except as would not
have a Material Adverse Effect. To the Company's knowledge, the Company
and the Subsidiaries are in compliance with all applicable existing
Environmental Laws, except for such instances of non-compliance which
would not have a Material Adverse Effect. The term "Hazardous Material"
means (i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulation under or within the meaning of
any other Environmental Law. To the Company's knowledge, no disposal,
release or discharge of "Hazardous Material" has occurred on, in, at or
about any of the facilities or properties of the Company or any of the
Subsidiaries, except for those instances which are in compliance with
Environmental Laws or in the aggregate would not have a Material
Adverse Effect. Except as described in the Prospectus, to the Company's
knowledge: (i) there has been no storage, disposal, generation,
transportation, handling or treatment of Hazardous Material by the
Company or any of the Subsidiaries (or to the knowledge of the Company,
any of its predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or any of the
Subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action which has not been taken, under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except
for such violations and failures to take remedial action which would
not result in, singularly or in the aggregate, a Material Adverse
Effect; (ii) there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property by the
Company or any of the Subsidiaries of any Hazardous Materials, except
for such spills, discharges, leaks, emissions, injections, escapes,
dumping or releases which are in compliance with Environmental Laws or
would not result in, singularly or in the aggregate, a Material Adverse
Effect.

(y) The Company is not an "investment company," a
company controlled by an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended and the rules or regulations thereunder.

- 11 -

(z) None of the proceeds of the sale of the Notes
will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Notes to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve Board.

(aa) The Company and the Subsidiaries have complied
and will comply with all the provisions of Florida H.B. 1771, codified
as Section 517.075 of the Florida Statutes, and all regulations
promulgated thereunder relating to issuers doing business with Cuba.

(bb) Except as set forth in this Agreement, there are
no claims, payouts, issuances, arrangements or understandings, whether
oral or written, for services in the nature of a finder's or
origination fee with respect to the sale of the Notes hereunder or any
other arrangement, agreement, understanding, payment or issuance with
respect to the Company, any of the Subsidiaries or any of their
respective officers, directors or affiliates that would constitute
underwriters' compensation as determined by the NASD. For these
purposes, underwriters' compensation means total expenses payable by
the Company to or on behalf of the Underwriters which normally would be
paid by the Underwriters, fees and expenses of Underwriters' Counsel
(as defined herein), finders fees, financial consulting and advisory
fees or other items of value accruing to the Underwriters and related
persons, which items of value include, but are not necessarily limited
to, stock, options, warrants and convertible and other debt securities
if the same are deemed to have been received in connection with or in
relation to the offering contemplated by this Agreement and when given
by or acquired from the Company or related parties of the Company or
persons in control of or under common control with the Company or
related parties of the Company.

(cc) The Indenture has been duly qualified under the
Trust Indenture Act, and all fees required to be paid with respect to
the execution of the Indenture and the issuance of the Notes have been
paid or will be paid when due.

2. PURCHASE BY THE UNDERWRITERS: DELIVERY AND PAYMENT.

(a) On the basis of the representations, warranties
and agreements contained herein, and subject to the terms and
conditions set forth herein, the Company agrees to issue and sell to
the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Company, the aggregate principal amount
of Firm Notes set forth opposite the name of such Underwriter in
Schedule I attached hereto at a purchase price equal to _% of the
principal amount thereof, plus any additional amount of Firm Notes
which each underwriter may become obligated to purchase pursuant to
Section 11 hereof.

- 12 -

(b) In addition, on the basis of the representations,
warranties and agreements contained herein, and subject to the terms
and conditions set forth herein, the Company hereby grants an option to
the Underwriters to purchase, severally and not jointly, any or all of
the Option Notes at a price equal to _% of the principal amount thereof
plus accrued interest from the Closing Date to the applicable Option
Closing Date. Such option will expire at 5:00 p.m. New York time 30
days after the date hereof, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of
the Firm Notes upon notice by the Underwriters to the Company setting
forth the aggregate principal amount of Option Notes as to which the
Underwriters are then exercising the option and the time and date of
delivery and payment therefor. Any such time and date of delivery and
payment (an "Option Closing Date") shall be determined by the
Underwriters, but shall not be later than five full business days after
the exercise of such option unless otherwise agreed by the Company and
the Underwriters.

(c) Delivery of, and payment for, the Firm Notes
shall be made at 10:00 a.m., New York City time, on ___________, 1997,
or at such other date or time as shall be agreed by the Underwriters
and the Company (such date and time being referred to herein as the
"Closing Date"). Delivery of, and payment for, the Firm Notes and the
Option Notes shall be made at the offices of Paul, Hastings, Janofsky &
Walker LLP ("Underwriters' Counsel"), New York, New York, or any such
other place as shall be agreed by the Underwriters and the Company. On
the Closing Date, the Company shall deliver or cause to be delivered to
the Underwriters certificates for the Firm Notes against payment to or
upon the order of the Company of the purchase price by certified or
official bank check, or if the Underwriters so elect, by wire or
book-entry transfer, in each case in immediately available funds. On
each Option Closing Date, the Company shall deliver or cause to be
delivered to the Underwriters certificates for the Option Notes
purchased thereat against payment to or upon the order of the Company
of the purchase price by certified or official bank check, or if the
Underwriters so elect, by wire or book-entry transfer, in each case of
New York Clearing House (next day) funds. Upon delivery, the Notes
shall be in such denominations and registered in such names as the
Underwriters shall have requested in writing not less than one full
business day prior to the Closing Date. The Company shall make the
certificates for the Notes available for inspection by the Underwriters
in New York, New York, not later than one full business day prior to
the Closing Date.

3. PUBLIC OFFERING OF THE NOTES. As soon after the
Registration Statement becomes effective as the Underwriters deem advisable, the
Underwriters shall make a public offering of the Notes (other than to residents
of any jurisdiction in which the qualification of the Notes is required and has
not become effective) at the price and upon the other terms set forth in the
Prospectus. The Underwriters may from time to time increase or decrease the
public offering price after the distribution of the Notes has been completed to
such extent as the Underwriters in their sole discretion deem advisable. The
Underwriters may enter into one or more agreements as

- 13 -

the Underwriters, in each of their sole discretion, deem advisable with one or
more broker-dealers who shall act as dealers in connection with such public
offering.

4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company
covenants and agrees with the Underwriters as follows:

(a) The Company shall use its best efforts to cause
the Registration Statement and any amendments thereto to become
effective as promptly as practicable and will not at any time, whether
before or after the effective date of the Registration Statement, file
any amendment to the Registration Statement or supplement to the
Prospectus or file any document under the Securities Act or Exchange
Act during any time that a prospectus relating to the Securities is
required to be delivered under the Securities Act of which the
Underwriters and Underwriters' Counsel shall not previously have been
advised and furnished with a copy, or to which the Underwriters or
Underwriters' Counsel shall have reasonably objected, or which is not
in compliance with the Securities Act, the Exchange Act, the Trust
Indenture Act or the Rules and Regulations.

(b) As soon as the Company is advised or obtains
knowledge thereof, the Company will advise the Underwriters and if
requested confirm in writing, (i) when the Registration Statement, as
amended, becomes effective and, if the provisions of Rule 430A
promulgated under the Securities Act will be relied upon, when the
Prospectus has been filed in accordance with said Rule 430A and when
any post-effective amendment to the Registration Statement becomes
effective, (ii) of the issuance by the Commission of any stop order or
of the initiation, or the threatening, of any proceeding suspending the
effectiveness of the Registration Statement or the qualification of the
Trustee or any order preventing or suspending the use of the
Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto, or the institution of proceedings for that purpose,
(iii) of the issuance by the Commission or by any state securities
commission of any proceedings for the suspension of the qualification
of any of the Securities for offering or sale in any jurisdiction or of
the initiation, or the threatening, of any proceeding for that purpose,
(iv) of the receipt of any comments from the Commission; and (v) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information. If the Commission or any state securities
commission shall enter a stop order or suspend such qualification at
any time, the Company will make every reasonable effort to obtain
promptly the lifting of such order or suspension at the earliest
possible time.

(c) The Company shall file the Prospectus or transmit
the Prospectus by a means reasonably calculated to result in filing
with the Commission pursuant to Rule 424(b)(1) (or, if applicable and
if consented to by the Underwriters, pursuant to Rule 424(b)(4)) on or
before the date it is required to be filed under the Securities Act and
the Rules and Regulations.

- 14 -

(d) The Company will give the Underwriters notice of
its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with the
offering of the Securities which differs from the corresponding
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Rules and
Regulations), and will furnish the Underwriters with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
prospectus to which the Underwriters or Underwriters' Counsel shall
reasonably object.

(e) The Company will furnish to the Underwriters and
Underwriters' Counsel, without charge, three photocopies of the
manually executed Registration Statement (including exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer
may be required by the Securities Act, as many copies of each
Preliminary Prospectus and Prospectus and any supplement thereto as the
Underwriters may reasonably request.

(f) The Company shall endeavor in good faith, in
cooperation with the Underwriters at or prior to the time the
Registration Statement becomes effective, to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Underwriters may designate to permit the continuance of sales and
dealings therein for as long as may be necessary to complete the
distribution contemplated hereby, and shall make such applications,
file such documents and furnish such information as may be required for
such purpose; provided, however, the Company shall not be required to
qualify as a foreign corporation, subject itself to taxation or file a
general consent to service of process in any such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company
will, unless the Underwriters agree that such action is not at the time
necessary or advisable, use all reasonable efforts to file and make
such statements or reports at such times as are or may reasonably be
required by the laws of such jurisdiction to continue such
qualification for so long as may be necessary to complete the
distribution contemplated hereby.

(g) During the time when a prospectus is required to
be delivered under the Securities Act, the Company shall comply with
all requirements imposed upon it by the Securities Act and the Exchange
Act, as now and hereafter amended and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Notes in accordance with the
provisions hereof and the Prospectus, or any amendments or supplements
thereto. If at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event shall have
occurred as a result of which, in the opinion of counsel for the
Company or Underwriters' Counsel, the Prospectus, as then amended or
supplemented, includes an

- 15 -

untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Securities Act, the Company will notify
the Underwriters promptly and prepare and file with the Commission an
appropriate amendment or supplement in accordance with Section 10 of
the Securities Act, each such amendment or supplement to be reasonably
satisfactory to Underwriters' Counsel, and the Company will furnish to
the Underwriters copies of such amendment or supplement as soon as
available and in such quantities as the Underwriters may reasonably
request.

(h) As soon as practicable, but in any event not
later than 45 days after the end of the 12-month period beginning on
the day after the end of the fiscal quarter of the Company during which
the effective date of the Registration Statement occurs (90 days in the
event that the end of such fiscal quarter is the end of the Company's
fiscal year), the Company shall make generally available to its
securityholders, in the manner specified in Rule 158(b) of the Rules
and Regulations, and to the Underwriters an earnings statement which
will be in the detail required by, and will otherwise comply with, the
provisions of Section ll(a) of the Securities Act and Rule 158(a) of
the Rules and Regulations, which statement need not be audited unless
required by the Securities Act, covering a period of at least 12
consecutive months after the effective date of the Registration
Statement.

(i) If the Company engages in business with the
Government of Cuba or with any person or affiliate located in Cuba, and
the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.

(j) For so long as the Company is a reporting company
under either Section 13 or 15(d) of the Exchange Act, the Company will
furnish to its securityholders, as soon as practicable, annual reports
(including financial statements audited by independent public
accountants) and will deliver to the Underwriters during the period
ending at the earlier of the fifth anniversary of the date hereof or
the date no Notes remain outstanding:

i) concurrently with furnishing such annual
reports to its securityholders, a balance sheet of the Company
as at the end of the preceding fiscal year, together with
statements of operations, stockholders' equity and cash flows
of the Company for such fiscal year, accompanied by a copy of
the report

- 16 -

thereon of independent certified public accountants;

ii) copies of the Quarterly Report on Form 10-Q
or Form 10-QSB;

iii) as soon as they are available, copies of all
reports (financial or other) mailed to stockholders;

iv) as soon as they are available, copies of all
reports and financial statements filed with the Commission,
any state securities commission, the NASD, the NASDAQ Stock
Market (NASDAQ), the American Stock Exchange or any other
securities exchange;

v) every press release which was released by or
on behalf of the Company or any of the Subsidiaries; and

vi) any additional information of a public nature
concerning the Company or any of the Subsidiaries (and any
future subsidiaries) or their respective businesses which the
Underwriters may reasonably request.

The foregoing financial statements will be on a consolidated basis to the extent
that the accounts of the Company and its Subsidiaries are consolidated, and will
be accompanied by similar financial statements for any Subsidiary which is not
so consolidated.

(k) For a period of four years after the Closing
Date, the Company shall timely file all such reports, forms or other
documents as may be required (including, but not limited to, a Form SR
as may be required pursuant to Rule 463 under the Securities Act) from
time to time under the Securities Act, the Exchange Act and the Rules
and Regulations, and all such reports, forms and documents filed will
comply as to form and substance with the applicable requirements under
the Securities Act, the Exchange Act and the Rules and Regulations.

(l) The Company shall furnish to the Underwriters as
early as practicable prior to each of the date hereof, the Closing Date
and each Option Closing Date, if any, but no later than two full
business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements of the Company and the
Subsidiaries (which in no event shall be as of a date more than 30 days
prior to the date of the Registration Statement) which have been read
by the Company's independent public accountants as stated in their
letters to be furnished pursuant to Section 7(j) hereof.

(m) The Company shall use its best efforts to
maintain the American Stock Exchange listing of the Common Stock.

(n) Until the completion of the distribution of the
Notes, neither the

- 17 -

Company nor any of the Subsidiaries shall, without the prior written
consent of the Underwriters and Underwriters' Counsel (which consent
shall not be unreasonably withheld), issue, directly or indirectly, any
press release or other communication or hold any press conference with
respect to the Company, any of the Subsidiaries, their respective
activities or the offering contemplated hereby, other than trade
releases issued in the ordinary course of the Company's business
consistent with past practices with respect to the Company's
operations.

(o) The Company will comply with all provisions of
all undertakings contained in the Registration Statement.

(p) For a period ending on the earlier of (i) four
years from the date hereof and (ii) the issuance of all of the
Underlying Stock, the Company will not take any action or actions which
may cause the exemption from registration provided by Section 3(a)(9)
of the Securities Act (or any successor provision) to be unavailable
for the conversion into Common Stock.

(q) For a period of four years after the effective
date of the Registration Statement, the Company shall use reasonable
efforts to provide to the Underwriters, at the Underwriters' request
and at the Company's sole expense, with a Blue Sky "Trading Survey" for
secondary sales of the Company's securities prepared by counsel to the
Company; provided, however that the Underwriters shall not make any
such request unless the Common Stock or the Notes are not listed on
NASDAQ, the NASDAQ Stock Market or a national securities exchange at
the time of such request.

(r) to use the proceeds from the sale of the Notes in
the manner described in the Prospectus under the caption "Use of
Proceeds."

(s) to use its reasonable efforts to do and perform
all things required to be done and performed under this Agreement by it
that are within its control prior to or after the Closing Date and to
use reasonable efforts to satisfy all conditions precedent on its part
to the delivery of the Notes.

(t) to not, so long as the Notes are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and will not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder.

(u) in connection with the offering, until the
Underwriters shall have notified the Company of the completion of the
resale of the Notes, to not, and to use its reasonable best efforts to
not permit any affiliated purchasers (as defined in Rule 10b-6 under
the Exchange Act), either alone or with one or more other persons to,
bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial

- 18 -

interest, any Notes, or attempt to induce any person to purchase any
Notes; and to not, and to use its reasonable best efforts to not permit
any of its affiliated purchasers to, make bids or purchases for the
purpose of creating actual, or apparent, active trading in or of
raising the price of the Notes.

(v) to not take any action prior to the execution and
delivery of the Indenture which, if taken after such execution and
delivery, would have violated any of the covenants contained in the
Indenture.

5. PAYMENT OF EXPENSES.

(a) The Company will pay all expenses incident to the
performance of the obligations of the Company under this Agreement and
the Indenture, including, without limitation: (i) the fees and expenses
of accountants and counsel for the Company, (ii) all costs and expenses
incurred in connection with the preparation, duplication, printing
(including mailing and handling charges), filing, delivery and mailing
(including the payment of postage with respect thereto) of each
Preliminary Prospectus and the Prospectus and any amendments and
supplements thereto, in quantities as hereinabove stated, (iii) the
printing and filing of the Registration Statement and each amendment
thereto and any registration under the Securities Act; (iv) the
printing, engraving, issuance and delivery of the Notes, (v) the
qualification of the Notes and the Underlying Stock under state or
foreign securities or "Blue Sky" laws and determination of the status
of such securities under legal investment laws, including the costs of
printing and mailing the "Preliminary Blue Sky Memorandum" and, the
"Supplemental Blue Sky Memorandum", and reasonable disbursements and
fees of counsel for the Underwriters in connection therewith, (vi)
costs and expenses of travel, food and lodging of Company personnel in
connection with the "road show," information meetings and
presentations, (vii) fees and expenses of the transfer agent and
registrar, (viii) fees and expenses of the Trustee, including the
Trustee's counsel, in connection with the Indenture and the Notes, (ix)
fees incurred in connection with the rating, if any, of the Notes, (x)
any transfer tax, stamp duty or similar tax payable by the Underwriters
in connection with the purchase by the Underwriters of the Notes, (xi)
the fees payable to the NASD incurred in connection with its review of
the Underwriting terms of the offering of the Securities, (xii) the
fees payable to the American Stock Exchange incurred in connection with
the listing of the Underlying Stock for trading on the American Stock
Exchange, (xiii) all costs of placing tombstone advertisements in The
New York Times, The Wall Street Journal and the Investment Dealers
Digest not to exceed an aggregate of $___________ and (xiv) all other
costs and expenses incident to the performance of its obligations
hereunder which are not specifically otherwise provided for in this
Section.

(b) If this Agreement is terminated for any reason
other than as a result of a breach of this Agreement by the
Underwriters, the Company shall reimburse and indemnify the
Underwriters for then reasonable actual accountable out-of-pocket

- 19 -

expenses, including the reasonable fees and expenses of Underwriters'
Counsel. In addition, the Company shall remain liable for all Blue Sky
counsel fees and expenses and Blue Sky filing fees as described above.

6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder shall be subject to the continuing
accuracy of the representations and warranties of the Company herein as of the
date hereof and as of the Closing Date and each Option Closing Date, if any, as
if they had been made on and as of the Closing Date or each Option Closing Date,
as the case may be; and the performance by the Company on and as of the Closing
Date and each Option Closing Date, if any, of its covenants and obligations
hereunder and to the following further conditions:

(a) The Registration Statement (including the
Statement of Eligibility and Qualification of the Trustee on Form T-l
(the "Form T-1), shall have become effective not later than 5:30 p.m.
New York time on the date hereof or at such later time and date as may
have been approved by the Underwriters and no stop order suspending the
effectiveness of the Registration Statement (including the Form T-l)
shall have been issued and no proceedings for that purpose shall have
been instituted or shall be pending or, to the knowledge of the Company
or the Underwriters, threatened by the Commission, and any request on
the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Underwriters' Counsel.
If the Company has elected to rely upon Rule 430A of the Rules and
Regulations, the price of the Securities and any price-related
information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the Rules and
Regulations within the prescribed time period, and prior to the Closing
Date the Company shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules
and Regulations.

(b) The Underwriters shall not have advised the
Company that the Registration Statement, or any supplement or amendment
thereto, contains an untrue statement of fact which, in the
Underwriters' reasonable opinion, is material or omits to state a fact
which, in the Underwriters' reasonable opinion, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto, contains an untrue statement of fact which, in the
Underwriters' reasonable opinion, is material or omits to state a fact
which, in the Underwriters' reasonable opinion is material and is
required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No order suspending the sale of the Securities in any
jurisdiction shall have been issued on either the Closing Date or the
relevant Option Closing Date, if any, and no proceedings for that
purpose shall have been instituted or shall, to the knowledge of the
Underwriters, be threatened.

- 20 -

(c) On or prior to the Closing Date and each Option
Closing Date, if any, the Underwriters shall have received from
Underwriters' Counsel such options or opinions with respect to the
organization of the Company, the validity of the Notes, the Underlying
Stock, the Registration Statement and other related matters as the
Underwriters may request and Underwriters' Counsel shall have received
such papers and information as they request to enable it to pass upon
such matters.

(d) On the Closing Date, the Underwriters shall have
received the opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., counsel to the Company, dated the Closing Date,
addressed to the Underwriters and in form and substance satisfactory to
the Underwriters and Underwriters' Counsel to the effect that:

i) the Company and each of the Subsidiaries (A)
has been duly organized and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation, (B) is duly qualified and
licensed and in good standing as a foreign corporation in each
jurisdiction identified in Annex A attached hereto wherein it
owns or leases material properties or conducts material
business and (C) has all requisite corporate power and
authority to own or lease its properties and conduct its
business as, to the knowledge of such counsel, it is now
conducted;

ii) the Company has a duly authorized, issued and
outstanding capitalization as set forth in the Prospectus
under the caption "Capitalization," subject to such
adjustments therein as are expressly contemplated by the
Prospectus; the Company owns, directly or through one or more
of the Subsidiaries, the percentage of the outstanding capital
stock of each Subsidiary as described in Annex A attached
hereto, in each case free and clear of any liens, charges,
claims, encumbrances, pledges, security interests, defects or
other encumbrances;

iii) except as disclosed in the Registration
Statement, to such counsel's knowledge neither the Company nor
any of the Subsidiaries is a party to or bound by any
instrument, agreement or other arrangement providing for it to
issue any capital stock, rights, warrants, options or other
securities of the Company or any of the Subsidiaries, except
for this Agreement and the Indenture and as described in the
Registration Statement; the Securities and all other
securities issued or issuable by each of the Company or any of
the Subsidiaries conform, or when issued and paid for, will
conform in all material respects to all statements with
respect thereto contained in the Registration Statement and
the Prospectus; all issued and outstanding equity securities
(including capital stock and options and rights with respect
thereto) of the Company or any of the Subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof are not subject to
personal liability by reason of being such

- 21 -

holders; to such counsel's knowledge, none of such securities
were issued in violation of the preemptive rights of any
securityholder of the Company or any of the Subsidiaries or
similar contractual rights granted by the Company or any of
the Subsidiaries or applicable securities laws; the Notes have
been duly authorized and, when validly authenticated, issued,
delivered and paid for in the manner contemplated by the
Indenture and this Agreement, will be duly authorized, validly
issued and outstanding obligations of the Company entitled to
the benefits of the Indenture (except as such benefits may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or
effecting creditors' rights and the application of equitable
principles in any action, legal or equitable); the Notes and
the Indenture conform in all material respects to the
description thereof set forth in the Registration Statement
and the Prospectus; the shares of Common Stock issuable upon
conversion of the Notes will, upon such issuance in accordance
with the Indenture, be duly authorized, validly issued, fully
paid and non-assessable; the Company has duly authorized and
reserved for issuance upon conversion of the Notes the shares
of Common Stock issuable upon such conversion; the Securities
to be sold by the Company hereunder and under the Indenture
are not and will not be subject to any preemptive or other
similar rights of any securityholder of the Company or any of
the Subsidiaries; the holders thereof will not be subject to
any liability solely as such holders; all corporate action
required to be taken for the authorization, issue and sale of
the Securities has been duly and validly taken; the
certificates representing the Securities are in due and proper
form; and upon the issuance and delivery pursuant to this
Agreement and the Indenture of the Notes to be sold by the
Company hereunder, and when the Underwriters take delivery of
the certificates representing the Notes, and assuming the
Underwriters are acquiring the Notes in good faith without
notice of any adverse claim (within the meaning of the Uniform
Commercial Code) the Underwriters will acquire good and
marketable title thereto free and clear of any pledge, lien,
charge, claim, encumbrance, security interest or other
encumbrance;

iv) the Registration Statement (including the
Form T-l) is effective under the Securities Act; a Prospectus
containing the information permitted to be omitted under Rule
430A has been filed in accordance with Rule 424(b); and to
such counsel's knowledge after due inquiry, no stop order
suspending the effectiveness of the Registration Statement or
the qualification of the Trustee is in effect and no
proceedings for that purpose have been instituted or are
threatened by the Commission (in rendering the opinion
required by this paragraph (iv), such counsel may rely solely
on the oral advice of the staff of the Commission to the
extent written confirmation from the Commission has not been
received);

v) the Registration Statement and the
Prospectus, and any

- 22 -

amendments or supplements thereto (other than the financial
statements and notes thereto and other financial, statistical
and accounting data included therein or omitted therefrom and
the Form T-1, as to which no opinion need be rendered) comply
as to form in all material respects with the requirements of
the Securities Act, the Trust Indenture Act and the Rules and
Regulations; and each of the Incorporated Documents (except
for the financial statements and the notes thereto and the
schedules and other financial and statistical data included
therein, as to which such counsel need not express any
opinion) complies as to form in all material respects with the
Exchange Act and the rules and regulations of the Commission
thereunder;

vi) the Indenture has been qualified under the
Trust Indenture Act;

vii) the descriptions in the Registration
Statement and the Prospectus of agreements and documents to
which the Company or any of the Subsidiaries is a party or by
which any of them or their respective properties are bound,
including any agreement or document incorporated by reference
into the Registration Statement and the Prospectus or of any
statutes, are accurate in all material respects and fairly
present the subject matter thereof; to such counsel's
knowledge there is no action, arbitration, suit or other
proceeding against the Company or any of the Subsidiaries, or
involving the properties or business of the Company or any of
the Subsidiaries, which (x) questions the validity of the
capital stock of the Company or any of the Subsidiaries or of
this Agreement, the Indenture or of any action taken or to be
taken by the Company or any of the Subsidiaries pursuant to or
in connection with any of the foregoing or (y) except as
disclosed in the Prospectus, could have a Material Adverse
Effect;

viii) the Company has full legal right, corporate
power and authority to execute, deliver and perform each of
this Agreement and the Indenture and to consummate the
transactions provided for herein and therein; and the
execution, delivery and performance of each of this Agreement
and the Indenture has been duly authorized, each of this
Agreement and the Indenture has been duly executed and
delivered by the Company, and, assuming due authorization,
execution and delivery by each other party thereto,
constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting
enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and
except as rights to indemnity or contribution may be limited
by applicable law);

ix) the execution or delivery by the Company of
this Agreement

- 23 -

and the Indenture, its performance hereunder or thereunder,
its consummation of the transactions contemplated herein or
therein, each in accordance with its terms, do not and will
not conflict with or result in any breach or violation of,
constitutes a default under or result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge,
security interest or other encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to
the terms of (A) the articles of incorporation or by-laws of
the Company or any of the Subsidiaries, (B) any license,
contract, indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note, loan or credit
agreement or other agreement or instrument known to such
counsel to which the Company or any of the Subsidiaries is a
party or by which any of them is or may be bound or to which
any of their respective properties or assets is or may be
subject, except for such conflicts, breaches, violations,
defaults and creations or impositions which in the aggregate
would not have a Material Adverse Effect, or (C) any statute,
rule or regulation (other than federal or state securities
laws) or, to the best of such counsel's knowledge, any
judgment, decree or order applicable to the Company or any of
the Subsidiaries of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body
having jurisdiction over the Company or any of the
Subsidiaries or any of their respective activities or
properties, except with respect to this clause (C) for such
conflicts, breaches, violations, defaults and creations or
impositions which in the aggregate would not have a Material
Adverse Effect;

x) to the knowledge of such counsel,
the Company and the Subsidiaries are not in violation of their
respective charters or by-laws; neither the Company nor any of
the Subsidiaries is in breach or, or in default with respect
to, any provisions of any license, contract, indenture,
mortgage, deed of trust, voting trust agreement, stockholders'
agreement, note, loan or credit agreement or other agreement
or instrument known to such counsel to which the Company or
any of the Subsidiaries is a party or by which any of them is
or may be bound or to which any of their respective properties
or assets is or may be subject, except for such breaches or
defaults as would not have a Material Adverse Effect, and to
the knowledge of such counsel, the Company and the
Subsidiaries are in material compliance with all laws, rules
and regulations and all judgments, decrees and orders of any
judicial or governmental authority to which the Company or any
of the Subsidiaries or by which any of them is or may be bound
or to which any of their respective properties or assets is or
may be subject, except for such noncompliance as would not
have a Material Adverse Effect;

xi) no consent, approval, authorization or order
of, and no filing with, any court, regulatory body, government
agency or other body (other than such as may have been made or
obtained and such as may be required under state securities or
Blue Sky laws or the rules of the NASD, as to which no opinion

- 24 -

need be rendered) is required in connection with the issuance
of the Securities as contemplated by the Prospectus, the
performance by the Company of this Agreement and the Indenture
and the transactions contemplated hereby and thereby;

xii) the information contained in the Prospectus
under the caption "Description of the Notes," "Business -
Legal Proceedings" and "Certain United States Federal Income
Tax Considerations," to the extent that it constitutes matters
of law, summaries of legal matters, documents or proceedings,
or legal conclusions, has been received by such counsel and is
correct in all material respects;

xiii) neither the consummation of the
transactions contemplated by this Agreement nor the sale,
issuance, execution or delivery of the Notes will violate
Regulation G, T, U or X of the Federal Reserve Board; and

xiv) the Company is not an "investment company,"
a company controlled by, or under common control with, an
"investment company," or a "promoter" or "principal
underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.

In rendering such opinion, such counsel may rely: (A) as to matters involving
the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel acceptable to Underwriters' Counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent they deem proper,
on certificates and written statements of responsible officers of the Company
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided, that
copies of any such statements or certificates shall be delivered to
Underwriters' Counsel if requested. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in form satisfactory
to such counsel and that the Underwriters and they are justified in relying
thereon. At each Option Closing Date, if any, the Underwriters shall have
received the favorable opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., dated such Option Closing Date, addressed to the Underwriters and
in form and substance satisfactory to the Underwriters and Underwriters' Counsel
confirming as of such Option Closing Date the statements made by such counsel in
their opinion delivered on the Closing Date.

(e) Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A. shall state in the opinion letters contemplated by
Section 6(d) that such counsel has participated in conferences with
officers and other representatives of the Company and representatives
of the independent public accountants for the Company and the
Subsidiaries and the

- 25 -

Underwriters, at which conferences the contents of the Registration
Statement and related matters were discussed, and, although such
counsel is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement, on the basis of the foregoing, no facts
have come to the attention of such counsel which has lead them to
believe that the Registration Statement as of its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except that such counsel need
express no opinion or belief with respect to the financial statements
and related notes and other financial, statistical or accounting data
included in the Registration Statement or excluded therefrom.

(f) On the Closing Date and each Option Closing Date,
if any, Underwriters' Counsel shall have been furnished such documents,
certificates and opinions as they may reasonably require and have
requested reasonably in advance for the purpose of enabling them to
review or pass upon the matters referred to in Section 6(c) hereof or
in order to evidence the accuracy, completeness or satisfaction of any
of the representations, warranties or conditions of the Company herein
contained.

(g) On and as of the Closing Date and each Option
Closing Date, if any: (i) there shall have been no material adverse
change and no development involving a prospective material adverse
change in the condition, financial or otherwise, prospects,
stockholders' equity or the business activities of the Company and the
Subsidiaries taken as a whole, whether or not in the ordinary course of
business, from the latest dates as of which such condition is set forth
in the Registration Statement and Prospectus; (ii) there shall have
been no transaction, not in the ordinary course of business, entered
into by the Company or any of the Subsidiaries, from the latest date as
of which the financial condition of the Company and the Subsidiaries is
set forth in the Registration Statement and Prospectus which is
materially adverse to the Company and the Subsidiaries taken as a
whole; (iii) neither the Company nor any of the Subsidiaries shall be
in default under any provision of any instrument relating to any
material outstanding indebtedness; (iv) no material amount of the
assets of the Company or any of the Subsidiaries shall have been
pledged or mortgaged, except as set forth in the Prospectus; (v) no
action, suit or proceeding, at law or in equity, shall have been
pending or, threatened (or circumstances which could reasonably be
expected to give rise to same shall have arisen) against the Company or
any of the Subsidiaries, or affecting any of their respective
properties or businesses, before or by any court or federal, state or
foreign commission, board or other administrative agency wherein an
unfavorable decision, ruling or finding may have a Material Adverse
Effect, except as set forth in the Prospectus; and (vi) no stop order
shall have been issued under the Securities Act and no proceedings
therefor shall have been initiated or threatened by the Commission or
any state regulatory authority.

(h) On the Closing Date and each Option Closing Date,
if any,

- 26 -

the Underwriters shall have received a certificate of the Company
signed by the chairman and by the chief financial or chief accounting
officer of the Company, in their capacities as such, dated the Closing
Date or such Option Closing Date, as the case may be, to the effect
that each of such persons has carefully examined the Registration
Statement, the Prospectus, this Agreement and the Indenture and that:

i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects, as if made on and as of the Closing Date or such
Option Closing Date, as the case may be, and the Company has
complied in all material respects with all agreements and
covenants and satisfied all conditions contained in this
Agreement and the Indenture on its part to be performed or
satisfied at or prior to the Closing Date or such Option
Closing Date, as the case may be;

ii) no stop order suspending the effectiveness of
the Registration Statement or any part thereof or the
qualification of the Trustee is in effect and no proceedings
for that purpose are pending or, to such officer's knowledge,
threatened;

iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the condition, financial or
otherwise business, prospects or results of operation of the
Company and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in the Prospectus;

iv) the Registration Statement and the Prospectus
and, if any, each amendment and each supplement thereto,
contain all statements and information required to be included
therein, and none of the Registration Statement or any
amendment or supplement thereto includes any untrue statement
of a material fact or omits to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading and none of the Prospectus
or any amendment or supplement thereto includes any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; and

v) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus: (a) neither the Company nor any of the
Subsidiaries has incurred up to and including the Closing Date
or the Option Closing Date, as the case may be, other than in
the ordinary course of its business, any material liabilities
or obligations, direct or continent, except as disclosed in
the Prospectus; (b) neither the Company nor any of the
Subsidiaries

- 27 -

has paid or declared any dividends or other distributions,
other than regular cash dividends, on its capital stock except
as disclosed in the Prospectus; (c) neither the Company nor
any of the Subsidiaries has entered into any material
transactions not in the ordinary course of business, except as
disclosed in the Prospectus; (d) there has not been any
material change in the capital stock of the Company from the
description thereof in the Registration Statement; (e) neither
the Company nor any of the Subsidiaries has sustained any
material loss or damage to its property or assets, whether or
not insured; and (f) there is no litigation which is pending
or to the best of the Company's knowledge threatened against
the Company, any of the Subsidiaries or any affiliated party
of any of the foregoing which would have a Material Adverse
Effect and which is required to be set forth in an amended or
supplemented Prospectus which has not been set forth.

(i) On or prior to the Closing Date and each Option
Closing Date, if any, the Underwriters shall have received a
certificate signed by the secretary of the Company, in his capacity as
such, dated the Closing Date or such Option Closing Date, as the case
may be, as to:

i) the absence of any contemplated proceeding for
the merger, consolidation, liquidation or dissolution of the
Company or any Subsidiary, as the case may be, or the sale of
all or substantially all of its assets;

ii) the due adoption and full force and effect of
the By-laws of the Company (with a copy of the By-laws
attached);

iii) resolutions adopted by the Board of
Directors of the Company and/or a committee thereof
authorizing the offering of the Notes and the consummation of
the transactions contemplated by this Agreement and the
Indenture (with copies of such resolutions attached); and

iv) the incumbency, authorization and signatures
of certain officers and directors of the Company, including
all those signing this Agreement, the Indenture and/or any
certificate delivered at such closing.

(j) By no later than 5:00 p.m. New York City time on
the date hereof the Underwriters shall have received a letter, dated
such date, addressed to the Underwriters in form and substance
satisfactory in all respects (including the non-material nature of the
changes or decreases, if any, referred to in clause (iii) below) to the
Underwriters and Underwriters' Counsel, from Deloitte & Touche LLP:

i) confirming that they are independent certified
public accountants with respect to the Company within the
meaning of the Securities Act and the Exchange Act and the
applicable Rules and Regulations;

- 28 -

ii) stating that it is their opinion that the
consolidated financial statements and supporting schedules of
the Company included in the Registration Statement comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange
Act and the applicable Rules and Regulations;

iii) stating that, on the basis of procedures
which included a reading of the latest available interim
consolidated financial statements of the Company (with an
indication of the date of the latest available unaudited
consolidated financial statements of the Company), a reading
of the latest available minutes of the stockholders and board
of directors and the various committees of the board of
directors of each of the Company and the Subsidiaries,
consultations with officers and other employees of each of the
Company and the Subsidiaries responsible for financial and
accounting matters and other procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information, nothing has come to
their attention which would lead them to believe that:

(A) the unaudited consolidated financial
statements of the Company included in the
Registration Statement are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited consolidated financial statements contained
in the Registration Statement;

(B) the unaudited consolidated financial
statements of the Company included in the
Registration Statement are not in conformity in form
in all material respects with applicable requirements
of the Securities Act and the applicable published
rules and regulations with respect to financial
statements included or incorporated in quarterly
reports on Form 10- Q under the Exchange Act;

(C) at the date of the latest available
balance sheet read by Deloitte & Touche LLP, and at a
subsequent date not more than five business days
prior to the date of delivery of such letter, there
has been any increase in consolidated short-term
indebtedness or long-term indebtedness of the Company
and the Subsidiaries, or any decrease in the
stockholders' equity or net current assets or net
assets of the Company, as compared with amounts shown
in the latest balance sheet included in the
Registration Statement, other than as set forth in or
contemplated by the Registration Statement, or, if
there was any change or decrease, setting forth the
amount of such change or decrease; or

(D) the period from the date of the latest
income

- 29 -

statement included in the Registration Statement to
the date of the latest available income statement
read by Deloitte & Touche LLP, and at a subsequent
date not more than five business days prior to the
date of delivery of such letter, there was any
decrease in consolidated net revenues or net income,
or net income per common share of the Company, in
each case as compared with the corresponding period
of the previous year, other than as set forth in or
contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount
of such decrease.

iv) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and
earnings, statements and/or other financial information
pertaining to the Company and the Subsidiaries contained in
the Registration Statement (in each case to the extent that
such amounts, numbers, percentages, statements and information
may be derived from the general accounting records, including
work sheets, of the Company and the Subsidiaries and excluding
any questions requiring an interpretation by legal counsel),
with the results obtained from the application of specified
readings, inquiries and other appropriate procedures set forth
in the letter and found them to be in agreement with such
results; and

v) statements as to such other matters incident
to the transaction contemplated hereby as the Underwriters may
request.

(k) At the Closing Date and each Option Closing Date,
if any, the Underwriters shall have received from Deloitte & Touche LLP
a letter, dated as of the Closing Date or such Option Closing Date, as
the case may be, to the effect that they reaffirm that statements made
in the letter furnished pursuant to Section 6(j) hereof, except that
the specified date referred to shall be a date not more than five days
prior to the Closing Date or such Option Closing Date, as the case may
be, and, if the Company has elected to rely on Rule 430A of the Rules
and Regulations, to the further effect that they have carried out
procedures as specified in clause (iv) of Section 6(j) hereof with
respect to certain amounts, percentages and financial information as
specified by the Underwriters and deemed to be a part of the
Registration Statement pursuant to Rule 430A(b) and have found such
amounts, percentages and financial information to be in agreement with
the records specified in such clause (iv).

(l) The Company shall have delivered to the
Underwriters a letter from Deloitte & Touche LLP addressed to the
Company stating that they have not with respect to or subsequent to the
Company's fiscal year ended ________, 1997 brought to the attention of
any of the Company's or the Subsidiaries management any 'weakness' as
defined in Statement of Auditing Standard No. 60 "Communication of
Internal Control Structure Related Matters Noted in an Audit" in any of
Company's or the Subsidiaries' internal controls.

- 30 -

(m) On each of the Closing Date and each Option
Closing Date, if any, there shall have been duly tendered to the
Underwriters the appropriate principal amount of Notes.

(n) Trading in the Common Stock shall not have been
suspended by the American Stock Exchange at any time after _________,
1997.

(o) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or limited, or minimum prices shall have been established on
either of such exchanges or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority
having jurisdiction, or trading in securities of the Company on any
exchange or in the over-the-counter market shall have been suspended or
(ii) any moratorium on commercial banking activities shall have been
declared by Federal or New York State authorities or (iii) an outbreak
or escalation of hostilities or a declaration by the United States of a
national emergency or war or such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Underwriters,
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes on the terms and in the manner contemplated in
the Registration Statement.

(p) The Indenture shall have been duly executed and
delivered by the Company and the Trustee and the Notes shall have been
duly executed and delivered by the Company and duly authenticated by
the Trustee.

(q) On the Closing Date the Underwriters shall have
received the favorable opinion of [Victor H. Mendelson], Esq., General
Counsel of the Company, dated the Closing Date, and addressed to the
Underwriters and in form and substance satisfactory to the Underwriters
and Underwriters' Counsel to the effect that:

i) the Company and each of the Subsidiaries has
full corporate power and authority, and all necessary
governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the
failure to so have any such authorizations, approvals, orders,
licenses, certificates, franchises or permits, individually or
in the aggregate, would not have a Material Adverse Effect),
to own their respective properties and to conduct their
respective businesses as now being conducted as described in
the Prospectus;

ii) the Company owns of record, directly or
indirectly, all the outstanding shares of capital stock of
each of the Subsidiaries free and clear of any adverse claims
or restrictions whatsoever, except as disclosed in the
Prospectus;

- 31 -

iii) except as described in the Prospectus or in
the Incorporated Documents, such counsel does not know of any
outstanding option, warrant or other right calling for the
issuance of, and such counsel does not know of any commitment,
plan or arrangement to issue, any share of capital stock of
the Company or any security convertible into or exchangeable
or exercisable for capital stock of the Company; except as
described in the Prospectus, such counsel does not know of any
holder of any securities of the Company or any other person
who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them
to underwrite the sale of, any of the Notes or the right to
have any Common Stock or other securities of the Company
included in the registration statement or the right, as a
result of the filing of the registration statement, to require
registration under the Act of any shares of Common Stock or
other securities of the Company;

iv) the Company has full legal right, corporate
power and authority to execute, deliver and perform each of
this Agreement and the Indenture and to consummate the
transactions provided for herein and therein; and the
execution, delivery and performance of each of this Agreement
and the Indenture has been duly authorized, each of this
Agreement and the Indenture has been duly executed and
delivered by the Company, and, assuming due authorization,
execution and delivery by each other party thereto,
constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its
terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application relating to or affecting
enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and
except as rights to indemnity or contribution may be limited
by applicable law);

v) to the knowledge of such counsel, neither the
Company nor any Subsidiary is in default in any material
respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or other
evidence of indebtedness or any material agreement, indenture,
lease or other instrument to which the Company or any
Subsidiary is a party or by which any of their respective
properties may be bound, which default or violation has or
would (with the passage of time, the giving of notice or both)
have a Material Adverse Effect, except as may be disclosed in
the Prospectus;

vi) the issuance, offer, sale and delivery of the
Notes by the Company, the execution, delivery and performance
of this Agreement and the Indenture by the Company, the
compliance by the Company with the provisions hereof and
thereof; and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will
not result in any violation of any judgment, injunction, order
or decree known to such counsel after reasonable

- 32 -

inquiry, applicable to the Company or any of the Subsidiaries
or any of their respective properties; and

vii) no consent, approval, authorization or order
of, and no filing with, any court, regulatory body, government
agency or other body (other than such as may have been made or
obtained and such as may be required under state securities or
Blue Sky laws or the rules of the NASD, as to which no opinion
need be rendered) is required in connection with the issuance
of the Securities as contemplated by the Prospectus, the
performance by the Company of this Agreement and the Indenture
and the transactions contemplated hereby and thereby.

In rendering such opinion, such counsel may rely: (A) as to matters involving
the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to Underwriters' Counsel) of
other counsel acceptable to Underwriters' Counsel, familiar with the applicable
laws; and (B) as to matters of fact, to the extent they deem proper, on
certificates and written statements of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company and the Subsidiaries, provided, that copies of any
such statements or certificates shall be delivered to Underwriters' Counsel if
requested. The opinion of such counsel shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and that the Underwriters
and they are justified in relying thereon. At each Option Closing Date, if any,
the Underwriters shall have received the favorable opinion of such counsel,
dated such Option Closing Date, addressed to the Underwriters and in form and
substance satisfactory to the Underwriters and Underwriters' Counsel confirming
as of such Option Closing Date the statements made by such counsel in their
opinion delivered on the Closing Date.

(r) Such counsel shall state in the opinion letters
contemplated by Section 6(q) that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company
and the Subsidiaries and the Underwriters, at which conferences the
contents of the Registration Statement and related matters were
discussed, and, although such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement on the basis
of the foregoing, no facts have come to the attention of such counsel
which has lead them to believe that the Registration Statement as of
its date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except that such counsel
need express no opinion or belief with respect to the financial
statements and related notes and other financial, statistical or
accounting data included in the Registration Statement or

- 33 -

excluded therefrom.

(s) On or prior to the date hereof, the Underwriters
shall have received clearance from the NASD as to the amount of
compensation allowable or payable to the Underwriters, as described in
the Registration Statement.

All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to the Underwriters.

If any condition to the Underwriters' obligations hereunder
to be fulfilled prior to or at the Closing Date or the relevant Option Closing
Date, as the case may be, is not so fulfilled, the Underwriters may terminate
this Agreement or, if the Underwriters so elect, they may waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment.

7. INDEMNIFICATION.

(a) The Company agrees to indemnify and hold harmless
each of the Underwriters (for purposes of this Section 7,
"Underwriters" shall include the officers, directors, partners,
employees and agents of each of the Underwriters, including
specifically each person who may be substituted for an Underwriter as
provided in Section 11 hereof), and each person, if any, who controls
an Underwriter ("controlling person") within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, from and
against any and all losses, claims, damages, expenses or liabilities,
joint or several (and actions, proceedings, suits and litigation in
respect thereof), whatsoever (including but not limited to any and all
reasonable expenses whatsoever incurred in investigating, preparing or
defending against any action, suit, proceeding or litigation, commenced
or threatened, or claim whatsoever), as the same are incurred, to which
any of the Underwriters or any such controlling person may become
subject (1) as a result of the failure of any representation or
warranty made by the Company under Section 1 to be true and correct
when made, or (2) under the Securities Act, the Exchange Act or any
other statute or at common law or otherwise insofar as such losses,
claims, damages, expenses or liabilities arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in (i) any Preliminary Prospectus, the Registration Statement
or the Prospectus (as from time to time amended and supplemented) (ii)
any post-effective amendment or amendments or any new registration
statement and prospectus in which are included securities of the
Company for use in the same offering or (iii) any blue sky application
or other document executed by the Company specifically for that purpose
or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the
Securities under the securities laws thereof (any such application,
document or information being hereinafter called a "Blue Sky
Application"), or arise out of or are based upon the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make

- 34 -

the statements therein not misleading (in the case of the Prospectus,
in the light of the circumstances under which they were made),
provided, however, that the Company shall not be liable in any such
case to the extent, but only to the extent, that any such loss, claim,
damage, expense or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriters
("Underwriters Information") specifically for inclusion therein and
provided, further, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any
Preliminary Prospectus or the Prospectus, the indemnification provided
for herein shall not apply to any loss, liability, claim, damage or
expense to the extent the same results from the sale of Notes to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus, or in the case of
an untrue statement or omission or alleged untrue statement or omission
in the Prospectus, a copy of the amended Prospectus or supplement
thereto, if the Company has previously furnished sufficient copies
thereof, based upon the number of copies indicated by the Underwriters,
to the Underwriters a reasonable time in advance and the claim, damage
or expense of such person results from an untrue statement or alleged
untrue statement or omission or alleged omission of a material fact
contained in a Preliminary Prospectus or Prospectus that was corrected
in the Prospectus or amendment or supplement thereto. The indemnity
agreement in this Section 7(a) shall be in addition to any liability
which the Company may have at common law or otherwise.

(b) The Underwriters agree severally and not jointly
to indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the Registration Statement and each
other person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to the
Underwriters, but only with respect to statements or omissions made in
conformity with the Underwriters' Information in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto.

(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any action, suit
or proceeding, such indemnified party shall, if a claim in respect
thereof is to be made against one or more indemnifying parties under
this Section 7, notify each party against whom indemnification is to be
sought in writing of the commencement thereof (but the failure to
notify an indemnifying party shall not relieve it from any liability
which it may have under Section 7 (a) or (b) unless and to the extent
that it has been prejudiced in a material respect by such failure or
from the forfeiture of substantial rights and defenses). In case any
such action, suit or proceeding is brought against any indemnified
party, and it notifies an indemnifying party or parties of the
commencement thereof, the indemnifying party or parties will be
entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume
the

- 35 -

defense thereof with counsel reasonably satisfactory to such
indemnified party, which may be the same counsel as counsel to the
indemnifying party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own
counsel in any such case but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by
the indemnifying parties in connection with the defense of such action
at the expense of the indemnifying party, (ii) the indemnifying parties
shall not have employed counsel reasonably satisfactory to such
indemnified party to take charge of the defense of such action within a
reasonable time after notice of commencement of the action or (iii)
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of such
indemnified party or parties), in any of which events such fees and
expenses of one additional counsel reasonably satisfactory o the
indemnifying parties shall be borne by the indemnifying parties. In no
event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. Anything in this Section 7 to the contrary
notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent.

(d) In order to provide for just and equitable
contribution in any case in which (i) an indemnified party makes claim
for indemnification pursuant to this Section 7, but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not
be enforced in such case notwithstanding the fact that the express
provisions of this Section 7 provide for indemnification in such case,
or (ii) contribution under the Securities Act may be required, then
each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid as a result of such losses,
claims, damages, expenses or liabilities (or actions, suits,
proceedings or litigation in respect thereof) (A) in such proportion as
is appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified
on the other hand, from the offering of the Securities or (B) if the
allocation provided by clause (A) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of each of the contributing parties, on the one hand, and the
party to be indemnified, on the other hand, in connection with the
statements or omissions that resulted in such losses, claims, damages,
expenses or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and the Underwriters, on the other, shall be deemed to be in
the same proportion as the total net proceeds from the offering of the

- 36 -

Notes (before deducting expenses) bear to the total discounts received
by the Underwriters hereunder, in each case as set forth in the table
on the cover page of the Prospectus. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company
or by the Underwriters, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses or
liabilities (or actions, suits, proceedings or litigation in respect
thereof) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, preparing or
defending any such action, claim, suit, proceeding or litigation.
Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the
underwriting discount applicable to the Notes purchased by the
Underwriters hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 1 l(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who
signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in
each case to this Section 7(d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit, proceeding or litigation against such party in
respect to which a claim for contribution may be made against another
party or parties under this Section 7(d), notify such party or parties
from whom contribution may be sought, but the omission so to notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have
hereunder or otherwise than under this Section 7(d), or to the extent
that such party or parties were not adversely affected by such
omission. The contribution agreement set forth above shall be in
addition to any liabilities which any indemnifying party may have at
common law or otherwise.

8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto
shall be deemed to be representations, warranties and agreements at the Closing
Date and each Option Closing Date, as the case may be, and the agreements of the
Company and the provisions with respect to the payment of expenses contained in
Sections 5 and 10 and the respective indemnity agreements contained in Section 7
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, the Company, any of the
Subsidiaries or any controlling person, and shall survive termination of this
Agreement or the issuance and delivery of the Securities to the Underwriters.

9. EFFECTIVE DATE. This Agreement shall become effective at
10:00 a.m., New

- 37 -

York City time, on the next full business day following the date hereof, or at
such earlier time after the Registration Statement becomes effective as the
Underwriters, in their discretion, shall release the Notes for the sale to the
public; provided, however, that the provisions of Sections 1, 5, 7 and 10 of
this Agreement shall at all times be effective. For purposes of this Section 9,
the Notes to be purchased hereunder shall be deemed to have been so released
upon the earlier of dispatch by the Underwriters of telegrams to securities
dealers releasing the Notes for offering or the release by the Underwriters for
publication of the first newspaper advertisement which is subsequently published
relating to the Notes.

10. TERMINATION.

(a) Subject to Section 10(b), the Underwriters shall
have the right to terminate this Agreement and the obligations
hereunder at any time prior to the Closing Date (and with respect to
the Option Notes, the Option Closing Date), without liability on the
part of any Underwriter if, on or prior to such date, (i) trading on
the New York Stock Exchange, the American Stock Exchange, the NASDAQ
Stock Market or in the over-the-counter market shall have been
suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required in the over-the-counter market by the NASD or by order of the
Commission or any other government authority having jurisdiction; (ii)
the United States shall have become involved in a war or major
hostilities, or there shall have been an escalation in an existing war
or major hostilities, or a national emergency shall have been declared
in the United States; (iii) a moratorium in foreign exchange trading
has been declared; (iv) the Company or any of the Subsidiaries shall
have sustained a loss material or substantial to the Company or any of
the Subsidiaries by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or
not such loss shall have been insured, will, in the Underwriters'
opinion, make it inadvisable to proceed with the delivery of the
Securities; (v) there shall have been such a material adverse change in
the conditions or prospects of the Company or any of the Subsidiaries
as in the Underwriters' judgment would make it inadvisable to proceed
with the offering, sale and/or delivery of the Securities; or (vi)
there shall have been such a material adverse change in the general
market, political or economic conditions in the United States or
elsewhere, as in the Underwriters' judgment would make it inadvisable
to proceed with the offering, sale and/or delivery of the Securities.
The right of the Underwriters to terminate this Agreement will not be
waived or otherwise relinquished by their failure to give notice of
termination prior to the time that the event giving rise to the right
to terminate shall have ceased to exist, provided that notice is given
prior to the Closing Date (and, with respect to the Option Notes, the
Option Closing Date).

(b) If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 10(a) or
Section 12 or if this Agreement shall not be carried out within the
time specified herein, or any extension thereof granted to the
Underwriters, by reason of any failure on the part of the Company to
perform any undertaking or satisfy

- 38 -

any condition of this Agreement by it to be performed or satisfied
(including, without limitation, pursuant to Section 6, Section 10(a) or
Section 12), then the Company shall promptly reimburse and indemnify
the Underwriters for all of their reasonable out-of-pocket expenses,
including the fees and disbursements of Underwriters' Counsel. In
addition, the Company shall remain liable for all Blue Sky counsel fees
and expenses and Blue Sky filing fees. Notwithstanding any contrary
provision contained in this Agreement, any election hereunder or any
termination of this Agreement (including, without limitation, pursuant
to Sections 6, 10, 11 and 12 hereof), and whether or not this Agreement
is otherwise carried out, the provisions of Section 5 and Section 7
shall not be in any way affected by such election or termination or
failure to carry out the terms of this Agreement or any part hereof.

11. SUBSTITUTION OF THE UNDERWRITERS. If one or more of the
Underwriters shall fail (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 6, Section 10 or
Section 12 hereof) to purchase the Securities which it or they are obligated to
purchase on such date under this Agreement (the "Defaulted Securities"), the
Underwriters shall have the right, within 48 hours thereafter, to make
arrangement for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Underwriters shall not have completed such arrangements
within such 48 hour period, then:

i) if the principal amount of Defaulted
Securities does not exceed 10% of the aggregate principal
amount of Firm Notes to be purchased on such date, the
non-defaulting Underwriters shall be obligated to purchase the
full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or

ii) if the principal amount of Defaulted
Securities exceeds 10% of the aggregate principal amount of
Firm Notes, this Agreement shall terminate without liability
on the part of any nondefaulting Underwriters.

No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of any default by such
Underwriter under this Agreement.

In the event of any such default which does not result in a
termination of this Agreement, the Underwriters shall have the right to postpone
the Closing Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements.

12. DEFAULT BY THE COMPANY. If the Company shall fail
at the Closing Date or any Option Closing Date, as applicable, to sell and
deliver the number of Securities which it is obligated to sell hereunder on such
date, then this Agreement shall terminate (or, if such default

- 39 -

shall occur with respect to any Option Securities to be purchased on an Option
Closing Date, the Underwriters may, at their option, by notice from the
Underwriters to the Company, terminate the Underwriters' obligation to purchase
Option Notes from the Company on such date) without any liability on the part of
any non-defaulting party other than pursuant to Sections 5, 7 and 10 hereof. No
action taken pursuant to this Section 12 shall relieve the Company from
liability, if any, in respect of such default.

13. NOTICES. All notices and communications hereunder, except
as herein otherwise specifically provided, shall be given in writing and shall
be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to them at
Forum Capital Markets L.P., 53 Forest Avenue, Old Greenwich, Connecticut 06870,
Attention: Mr. C. Keith Hartley, with a copy to Paul, Hastings, Janofsky &
Walker LLP, 399 Park Avenue, New York, New York 10019, Attention: Neil Torpey,
Esq. Notices to the Company shall be directed to the Company at Heico
Corporation, 3000 Taft Street, Hollywood, Florida 3021, Attention: General
Counsel, with a copy to Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., 1221 Brickell Avenue, Miami, Florida 33131, Attention: Bruce MacDonough ,
Esq.

14. PARTIES. This Agreement shall inure solely to the benefit
of and shall be binding upon the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained. No purchaser of Notes from the Underwriters shall be deemed to be a
successor by reason merely of such purchase.

15. CONSTRUCTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without giving effect to choice of law or conflict of laws principles.

16. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which taken together shall be deemed to be one and the same instrument.

17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes
the entire agreement of the parties hereto and supersedes all prior written or
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may not be amended except in a writing signed by
the Underwriters and the Company.

- 40 -

If the foregoing correctly sets forth the understanding
between the Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.

ANNEX A
---------------------- ------------------------------ ----------------------
Name State of Incorporation Jurisdictions in
which Qualified to
Conduct Business
Heico Corporation Florida
[Subsidiaries]

INDENTURE dated as of ___________, 1997, between Heico Corporation, a Florida
corporation, and _______________________, as trustee.

Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the registered holders of the Company's ____%
Convertible Subordinated Notes due _____________, 2004 (the "NOTES"):

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1 DEFINITIONS.

"AFFILIATE" of a Person means (i) any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with
such specified Person. For the purpose of this definition, "CONTROL" of a Person
means the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by ownership of voting
securities, by contract or otherwise, and "CONTROLLING" or "CONTROLLED" have
corresponding meanings.

"AGENT" means any Registrar, Paying Agent or Conversion Agent.

"BOARD OF DIRECTORS" means the Board of Directors of the Company or any duly
authorized committee thereof, except that, for purposes of the definitions of
"CHANGE OF CONTROL," "CONTINUING DIRECTORS," and "BOARD OF DIRECTORS" means the
Board of Directors of the Company.

"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banking institutions in the city of New York, New York, are required or
authorized by law or other governmental action to be closed.

"CAPITAL STOCK" of any Person means the Common Stock or Preferred Stock of
such Person. Unless otherwise stated herein or the context otherwise requires,
"Capital Stock" means Capital Stock of the Company.

"CHANGE OF CONTROL" means the occurrence of any of the following events after
the date of this Indenture: (i) any Person (including, without limitation, any
"person" within

1

the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding the
Company, any Subsidiary and any employee benefit plan of the Company or any
Subsidiary) becomes the direct or indirect beneficial owner of shares of Capital
Stock representing greater than 50% of the combined voting power of all
outstanding shares of Capital Stock entitled to vote in the election of
directors under ordinary circumstances, (ii) the Company consolidates with or
merges into any other Person and the outstanding Common Stock is changed or
exchanged as a result, (iii) the sale, transfer or other disposition of a
majority of the assets of the Company or of the collective assets of the Company
and the Subsidiaries, (iv) at any time Continuing Directors cease for any reason
to constitute a majority of the Board of Directors then in office, or (v) the
Company makes any distribution of cash, Property or securities (other than
regular quarterly dividends, Common Stock, Preferred Stock which is
substantially equivalent to the Common Stock or rights to acquire Common Stock
or Preferred Stock which is substantially equivalent to the Common Stock) to
holders of Common Stock, or the Company or any Subsidiary purchases or otherwise
acquires Common Stock, and the sum of the Fair Market Value of such cash,
Property or securities distributed or Common Stock purchased on the date the
same is made, plus the Fair Market Value, when made, of all other cash, Property
or securities so distributed and Common Stock so purchased which have occurred
during the 12-month period ending on such date, in each case expressed as a
percentage of the aggregate Current Market Price of all Common Stock outstanding
at the close of business on the last Trading Day prior to the date of such
distribution or purchase, exceeds 50%.

"COMMON STOCK" of any Person other than the Company means the common equity
(however designated), including, without limitation, common stock or partnership
or membership interests of, or participations or interests in such Person (or
equivalents thereof). "Common Stock" of the Company means the Common Stock, par
value $.01 per share, of the Company, any successor class or classes of common
equity (however designated) of the Company into or for which such Common Stock
may hereafter be converted, exchanged or reclassified and any class or classes
of common equity (however designated) of the Company which may be distributed or
issued with respect to such Common Stock or successor class or classes to
holders thereof generally. Unless otherwise stated herein or the context
requires otherwise, "Common Stock" means Common Stock of the Company.

"COMPANY" means Heico Corporation, a Florida corporation, until a successor
replaces it in accordance with the applicable provisions of this Indenture and,
thereafter, "Company" shall mean such successor.

2

"CONTINUING DIRECTORS" means any member of the Board of Directors who (i) is
a member of the Board of Directors on the date hereof or (ii) who was nominated
or elected by at least two-thirds of the directors who were Continuing Directors
at the time of such nomination or election or whose election to the Company's
Board of Directors was recommended or endorsed by at least two-thirds of the
directors who were Continuing Directors at the time of such election.

"CURRENT MARKET PRICE" means, when used with respect to any security as of
any date, the last sale price, regular way, or, in case no such sale takes place
on such date, the average of the closing bid and asked prices, regular way, of
such security in either case as reported for consolidated transactions on the
New York Stock Exchange or, if such security is not listed or admitted to
trading on the New York Stock Exchange, as reported for consolidated
transactions with respect to securities listed on the principal national
securities exchange on which such security is listed or admitted to trading or,
if such security is not listed or admitted to trading on any national securities
exchange, as reported on the Nasdaq National Market, or, if such security is not
listed or admitted to trading on the Nasdaq National Market, as reported on the
Nasdaq SmallCap Market, or if such security is not listed or admitted to trading
on any national securities exchange or the Nasdaq National Market or the Nasdaq
SmallCap Market, the average of the high bid and low asked prices of such
security in the over-the-counter market as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System or such other system
then in use or, if such security is not quoted by any such organization, the
average of the closing bid and asked prices of such security furnished by a New
York Stock Exchange member firm selected by the Company. If such security is not
quoted by any such organization and no such New York Stock Exchange member firm
is able to provide such prices, the Current Market Price of such security shall
be the Fair Market Value thereof.

"DEFAULT" means any event which is, or with the passage of time or the giving
of notice or both would be, an Event of Default.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

"FAIR MARKET VALUE" means, at any date as to any asset, Property or right
(including, without limitation, Capital Stock of any Person, evidences of
indebtedness or other securities, but excluding cash), the fair market value of
such item as determined in good faith by the Board of Directors, whose
determination shall be conclusive; PROVIDED, HOWEVER, that such determination is
described in an Officers' Certificate filed with the Trustee and that, if there
is a Current Market Price for such item on such date, "Fair

3

Market Value" means such Current Market Price (without giving effect to the last
sentence of the definition thereof).

"GAAP" means, as of any date, generally accepted accounting principles in the
United States and does not include any interpretations or regulations that have
been proposed but that have not become effective.

"HOLDER" means a Person in whose name a Note is registered on the Register.

"INDENTURE" means this Indenture, as amended or supplemented from time to
time.

"INVESTMENT" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or indirect
loans (including guarantees of indebtedness or other obligations), advances or
capital contributions, purchases or other acquisitions for consideration of
indebtedness, equity interests or other securities, together with all other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.

"JUNIOR SECURITIES" means (a) shares of any and all classes of Capital Stock
and (b) securities of the Company which are subordinated in right of payment to
Senior Indebtedness at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in Article 11.

"OFFICER" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice President of such Person.

"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, one of
whom must be the Chairman of the Board, the President, the Treasurer or a
Vice-President of the Company, that meets the requirements of Sections 13.3 and
13.4; PROVIDED, HOWEVER, that for purposes of Section 4.7, "Officers'
Certificate" means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company.

4

"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and that meets the requirements of Sections
13.3 and 13.4. The counsel may be an employee of or counsel to the Company or to
the Trustee.

"PERSON" means any individual, corporation, partnership, association, trust
or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.

"PREFERRED STOCK" of any Person means the class or classes of equity,
ownership or participation interests (however designated) in such Person,
including, without limitation, stock, share, partnership and membership
interests, which are preferred as to the payment of dividends or distributions
by, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of, such Person (or equivalents thereof) over
interests of any other class of interests of such Person. Unless otherwise
stated herein or the context otherwise requires, "Preferred Stock" means
Preferred Stock of the Company.

"PRINCIPAL" of a debt security means the principal of the security plus the
premium, if any, on the security. "Principal" shall include, with respect to the
Notes, the redemption price, if any, payable thereon.

"PROPERTY" of any Person means any and all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included on the
most recent consolidated balance sheet of such Person in accordance with GAAP.

"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

"SENIOR INDEBTEDNESS" means the principal of (and premium, if any) and
accrued interest on (a) indebtedness of the Company (including indebtedness of
other Persons guaranteed by the Company), other than the Notes which is (i) for
money borrowed or (ii) evidenced by a note or similar instrument given in
connection with the acquisition of any business, Property or assets, (b)
obligations of the Company, as lessee under leases required to be capitalized on
the balance sheet of the lessee under GAAP and leases of Property or assets made
as part of any sale and leaseback transaction to which the Company is a party,
(c) amendments, renewals, extensions, modifications and refundings

5

of any such indebtedness or obligation, and (d) future indebtedness of the
Company described in (a) above, and amendments, renewals, extensions,
modifications and refundings thereof, if the instrument creating or evidencing
such future indebtedness provides that such indebtedness or obligation is senior
in right of payment to the Notes. "Senior Indebtedness" shall not include
indebtedness or amounts owed (except to banks or other financial institutions)
for compensation to employees, or for goods or materials purchased or services
utilized, in the ordinary course of business of the Company or of any other
Person from whom such indebtedness or amount was assumed.

"SUBSIDIARY" of a Person on any date means any other Person, a majority of
whose Capital Stock with voting power, under ordinary circumstances, entitling
holders of such Capital Stock to elect the board of directors or other governing
body of such other Person, is at such date, directly or indirectly, owned by
such Person and/or a Subsidiary or Subsidiaries of such Person. Unless otherwise
stated herein or the context otherwise requires, "Subsidiary" means Subsidiary
of the Company.

"TIA" or "TRUST INDENTURE ACT OF 1939" means the Trust Indenture Act of 1939
(U.S. Code ss.ss. 77aaa-77bbbb) as amended and as in effect on the date of this
Indenture; PROVIDED, HOWEVER, that if the TIA is amended after such date, "TIA"
or "Trust Indenture Act of 1939" means, to the extent required by any such
amendments, the TIA as so amended.

"TRADING DAY" means (i) if the applicable security is listed or admitted for
trading on a national security exchange, a day on which such exchange is open
for business, (ii) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made thereon, or (iii) if the applicable
security is not so listed, admitted for trading or quoted, any Business Day.

"TRUST OFFICER" means any officer or corporate trust officer or assistant
corporate trust officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.

"TRUSTEE" means the party identified in the title of this Indenture as
trustee until a successor replaces it in accordance with the applicable
provisions of this Indenture and, thereafter, "Trustee" means such successor.

"UNRESTRICTED SUBSIDIARIES" means any Subsidiaries of the Company which (i)
are not wholly-owned by the Company, (ii) are designated as Unrestricted
Subsidiaries by the Board of Directors (as evidenced by minutes of a meeting or
written consent of directors) and (iii) at the time of any Investment by the
Company in such Subsidiary, whose net operating income represents less than 10%
of the Company's net operating income as shown on the

6

Company's consolidated income statement as at the time of such Investment.
Notwithstanding the foregoing, in no event shall Jet Avion Corporation be
designated an Unrestricted Subsidiary.

"U.S. GOVERNMENT OBLIGATIONS" means non-callable (i) direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States for which its full faith and credit are pledged and (ii)
obligations of a Person controlled or supervised by, and acting as an agency or
instrumentality of, the United States, the payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States.

This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. Such provisions
shall apply to this Indenture at all times, notwithstanding that at any time or
from time to time this Indenture is not required to be qualified under the TIA.

The following TIA terms used in this Indenture have the following meanings:

"Commission" means the SEC;

"indenture securities" means the Notes;

"indenture security holder" means a Holder;

"indenture to be qualified" means this Indenture;

"indenture trustee" or "institutional trustee" means the Trustee; and

"obligor" on the Notes means the Company and any successor obligor on the
Notes.

All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein have the meanings so assigned to them.

(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;

(3) "or" is not exclusive;

(4) words in the singular include the plural, and in the plural
include the singular;

8

(5) references to sections of or rules under the Securities Act, the
Exchange Act or the TIA shall be deemed to include substitute,
replacement or successor sections or rules;

(6) references to Sections or Articles mean Sections or Articles of
this Indenture; and

(7) solely for purposes of this Indenture and the Notes, a
determination, approval or other action by the Board of Directors
shall not be deemed to have been made, given or taken unless it is
set forth in a written resolution or resolutions (or comparable
written instrument) duly adopted thereby.

ARTICLE 2.

THE NOTES

SECTION 2.1 FORM AND DATING.

The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Note shall be dated
the date of its authentication. The terms of the Notes set forth in Exhibit A
are part of the terms of this Indenture.

SECTION 2.2 EXECUTION AND AUTHENTICATION.

Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.

Any Note bearing the manual or facsimile signature of an individual shall be
valid notwithstanding that such individual ceased to be an Officer prior to
authentication of the Note or ceased to hold the office of Company ascribed to
such individual on the Note.

A Note shall not be valid until authenticated by the manual signature of the
Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.

9

The Trustee shall authenticate Notes for original issue up to the aggregate
principal amount stated in Paragraph 4 of the Notes, upon delivery of (i) a
written order of the Company signed by an Officer directing the Trustee to
authenticate the Notes and (ii) an Officers' Certificate certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount, except as provided in Section 2.8.

The Trustee may appoint an authenticating agent upon the approval and at the
expense of the Company to authenticate Notes. Unless limited by the terms of
such appointment, an authenticating agent shall be authorized to authenticate
Notes at such times and upon such conditions as the Trustee is so authorized.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent.

SECTION 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

The Company shall maintain in the City of New York, New York, an office or
agency where Notes may be presented for registration of transfer or for exchange
(the "REGISTRAR"), an office or agency where Notes may be presented for payment
(the "PAYING AGENT") and an office or agency where the Notes may be presented
for conversion (the "CONVERSION AGENT"). The Registrar shall keep a register of
the Notes (the "REGISTER") and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents upon
the reasonable approval of the other Registrar or Registrars or Paying Agent or
Paying Agents, as the case may be, and at the expense of the Company. The term
"Registrar" includes any co-registrar or co-registrars and the term "Paying
Agent" includes any additional paying agent or paying agents. The Company may
change any Paying Agent, Conversion Agent or Registrar without notice to any
Holder. The Company shall promptly notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. The Company or any
Subsidiary may act as Paying Agent (except for purposes specified in Sections
2.8 and 4.1), Conversion Agent or Registrar. If the Company fails to appoint or
maintain itself or another Person as Registrar, Conversion Agent or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.7.

The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee of the name and address of any such
Agent.

The Company initially appoints the office of the Trustee at
________________________________________, and through it the offices of its
agent,

10

____________________ at __________________________, as the offices or agencies
for each of the purposes designated in this Section 2.3 to act as Registrar,
Paying Agent and Conversion Agent with respect to the Notes.

SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.

The Company shall require each Paying Agent (other than the Trustee) to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of Principal
or repurchase price, if any, of or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee and account for any money disbursed by it. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any money disbursed by it. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary of the Company) shall
have no further liability for the money delivered to the Trustee. If the Company
or an Affiliate of the Company acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.5 HOLDER LISTS.

The Trustee shall preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of Holders. If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least ten Business Days before each Interest Payment Date, and at such other
times as the Trustee may request in writing within five Business Days after such
request, a list in such form and as of such date as the Trustee may reasonably
require, and upon which the Trustee may conclusively rely, of the names and
addresses of, and principal amount of Notes held by, the Holders.

SECTION 2.6 TRANSFER AND EXCHANGE.

Upon surrender for registration or transfer of any Note, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing, at the office
or agency of the Registrar, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange of Notes;

11

PROVIDED, that the Company may require from a Holder requesting such transfer or
exchange (other than any exchange of a temporary Note for a definitive Note not
involving any change in ownership) payment of an amount sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange.

Transfers of Notes may be effected only by surrender of the Notes to the
Company for registration and the issuance by the Company of one or more new
Notes. Until such surrender and registration, the Company may treat the Holders
of Notes appearing on the Register as the absolute owners of such Notes.

At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination or denominations, of a like aggregate principal amount,
upon surrender of the Notes to be exchanged, together with a written instrument
of transfer satisfactory to the Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing, at the office or agency of the
Registrar. Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, Notes which the Holder
making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall
be valid obligations of the Company, evidencing the same debt and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.

The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Notes selected for redemption during the
15-day (or shorter) period set forth in the first paragraph of Section 3.1
(except, in the case of Notes to be redeemed in part, the portion thereof not to
be redeemed) or (b) any Notes with respect to which a repurchase election has
been tendered and not withdrawn by the Holder thereof in accordance with Section
4.6 (except, in the case of Notes tendered for purchase in part, the portion
thereof not to be purchased).

SECTION 2.7 REPLACEMENT NOTES.

Upon surrender of a mutilated Note at the office or agency of the Registrar,
the Company shall execute, and the Trustee shall authenticate and deliver, a
replacement Note in the name of the Holder of such mutilated Note, of like
principal amount and dated the date of such mutilated Note.

12

Upon surrender of written notice by a Holder or a Holder's attorney duly
authorized in writing at the office or agency of the Registrar that a Note has
been lost, destroyed or wrongfully taken, the Company shall execute, and the
Trustee shall authenticate and deliver, a replacement Note in the name of such
Holder, of like principal amount and dated the date of such lost, destroyed or
wrongfully taken Note; PROVIDED, HOWEVER, that, unless such requirement is
waived by the Company, such notice shall be accompanied by an indemnity bond
that is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss which
any of them may suffer by reason of such Note's replacement.

The Company may charge the Holder for its expenses in replacing a Note.

Every replacement Note shall be an additional obligation of the Company and
shall be entitled to all benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

SECTION 2.8 OUTSTANDING NOTES.

The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.8 as not outstanding. Except as set forth
in Section 2.9, a Note does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.7, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a BONA FIDE purchaser.

If the principal amount of any Note is considered paid under Section 4.1, it
ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, any Subsidiary or an Affiliate
of any thereof) segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to redeem or
pay Notes payable on that date, and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Indenture, then on and after
such redemption date or maturity date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.

13

SECTION 2.9 TREASURY NOTES.

In determining whether the Holders of the required aggregate principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or by any Affiliate of the Company shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes as to which a Trust Officer of the Trustee knows are so owned shall be so
disregarded.

SECTION 2.10 TEMPORARY NOTES.

Until definitive Notes are ready for delivery, the Company may prepare and
execute and the Trustee shall authenticate and deliver temporary Notes upon a
written order of the Company signed by an Officer and delivered to a Trust
Officer. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for temporary
Notes. If temporary Notes are issued, the Company shall, without unreasonable
delay, prepare definitive Notes which may be exchanged for temporary Notes.

After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Registrar, without charge to Holders. Upon surrender for
cancellation of one or more temporary Notes, the Company shall execute and the
Trustee upon a written order of the Company signed by an Officer shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes.

SECTION 2.11 CANCELLATION.

The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar, Conversion Agent and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange, conversion
or payment. The Trustee shall promptly cancel and destroy (in accordance with
the standard document destruction policies of the Trustee) all Notes so
delivered and certify to the Company their destruction unless by a written order
signed by an Officer, the Company shall direct that canceled Notes be returned
to it. The Company may not issue new Notes to replace Notes that have matured or
been converted or redeemed.

14

SECTION 2.12 DEFAULTED INTEREST.

If the Company defaults in a payment of interest on the Notes, the Company
shall pay defaulted interest (plus interest on such defaulted interest to the
extent lawful) in any lawful manner. The Company shall pay the defaulted
interest to the Persons who are Holders on a subsequent special record date. The
Company shall fix or cause to be fixed (or upon the Company's failure to do so
the Trustee shall fix) any such special record date and payment date to the
reasonable satisfaction of the Trustee, which specified record date shall not be
less than 10 days prior to the payment date for such defaulted interest, and
shall promptly mail or cause to be mailed to each Holder a notice that states
the special record date, the payment date and the amount of defaulted interest
to be paid. The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid with respect to such defaulted
interest or shall make arrangements reasonably satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, which money when so
deposited shall be held in trust for the benefit of the Person entitled to such
defaulted interest as provided in this Section 2.12.

SECTION 2.13 DEPOSIT OF MONEYS.

Prior to 10:00 a.m., New York City time, on each Interest Payment Date and
the maturity date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or maturity date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or maturity date, as the case may be.

ARTICLE 3.

REDEMPTION

SECTION 3.1 NOTICES TO TRUSTEE.

If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Paragraph 5 of the Notes, it shall notify the Trustee in writing
of the redemption date, the Section of the Indenture and/or Paragraph of the
Note pursuant to which such redemption shall be effected, the principal amount
of Notes to be redeemed and the redemption price at least 15 days prior to
mailing any notice of redemption to the

15

Holders (unless the Trustee consents to a shorter period). Such notice shall be
in the form of an Officers' Certificate from the Company and will state that
such redemption will comply with the conditions herein.

If less than all the Notes are to be redeemed, the record date relating to
such redemption shall be selected by the Company and given to the Trustee, which
record date shall be not less than 15 days after the date of notice to the
Trustee.

SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.

If less than all the Notes are to be redeemed, the Trustee shall select the
Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or admitted
to trading or, if the Notes are not so listed or admitted to trading, by lot or
by such other method that the Trustee considers fair and appropriate. The
Trustee shall make the selection not more than 60 days and not less than 30 days
before the redemption date from Notes outstanding and not previously called for
redemption. The Trustee may select for redemption portions of the principal
amount of Notes that have denominations larger than $1,000. Notes and portions
thereof selected by the Trustee shall be in amounts of $1,000 or integral
multiples of $1,000. If less than all of the Notes are to be redeemed and a Note
is converted in accordance with Article 10 after the date on which notice of
redemption is given pursuant to Section 3.3 and prior to the time and date
specified in Section 3.5, such Note shall, for purposes of determining the
amount of such Notes which have been redeemed, be deemed to have been redeemed.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be called for redemption.

SECTION 3.3 NOTICE OF REDEMPTION.

At least 30 days but not more than 60 days before a redemption date, the
Company or, upon written notice to the Trustee by the Company, the Trustee shall
give a notice of redemption to the Holders.

The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date;

(b) the redemption price;

16

(c) the Conversion Price;

(d) the name and address of the Paying Agent and Conversion Agent;

(e) that Notes called for redemption may be converted at any time
before the close of business on the Business Day immediately
preceding the redemption date in accordance with Article 10;

(f) that Holders who want to convert Notes must satisfy the
requirements in Paragraph 8 of the Notes;

(g) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;

(h) the CUSIP number of the Notes;

(i) if fewer than all of the outstanding Notes are to be redeemed, the
certificate numbers and principal amounts of the particular Notes
to be redeemed;

(j) if any Note is being redeemed in part, that, after the redemption
date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
and

(k) that unless the Company defaults in making such redemption payment
or the Paying Agent is prohibited from making such redemption
payment pursuant to the terms of this Indenture, interest on Notes
called for redemption ceases to accrue on and after the redemption
date.

If the Trustee gives such notice of redemption, it shall do so in the
Company's name and at the Company's expense and the Company shall provide the
Trustee with the information required to give such notice of redemption.

Notice of redemption given in accordance with Sections 3.3 and 13.2 to each
Holder shall be deemed to have been duly given, whether or not any particular
Holder receives such notice. Once notice of redemption is so mailed, Notes
called for redemption become

17

due and payable on the redemption date at the redemption price set forth in the
Notes. A notice of redemption may not be conditional. Upon surrender to the
Trustee or the Paying Agent, such Notes called for redemption shall be paid at
the redemption price. References in this Indenture to the "redemption price"
mean the redemption price set forth in the Notes plus the interest payable as
provided in the Notes on Notes called for redemption.

SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.

On or before 10:00 a.m., New York City time, on any redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption which prior thereto have been delivered by the Company to the Trustee
for cancellation or have been converted; PROVIDED, HOWEVER, that any such
deposit shall be a payment with respect to the Notes and shall be subject to the
provisions of Article 11 and shall be permitted only if payment would be
permitted under Article 11. The Trustee or the Paying Agent shall return to the
Company any money not required for the purpose of paying such redemption price.

SECTION 3.6 NOTES REDEEMED IN PART.

Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.

ARTICLE 4.

COVENANTS

SECTION 4.1 PAYMENT OF NOTES.

The Company shall pay the Principal and repurchase price, if any, of and
interest on the Notes on the dates and in the manner provided in the Notes and
this Indenture. Principal and interest shall be considered paid on the date due
if the Paying Agent (other than the Company or a Subsidiary) on that date holds
money in accordance with this Indenture designated for and sufficient to pay in
cash all Principal and interest then due and the Paying Agent is not prohibited
from paying such money to Holders on that date pursuant to the terms of this
Indenture.

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To the extent lawful, the Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on (i) overdue Principal
and repurchase price, if any, of the Notes at the rate borne by the Notes and
(ii) overdue installments of interest at the same rate.

SECTION 4.2 STAY, EXTENSION AND USURY LAWS.

The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law has been enacted.

SECTION 4.3 CONTINUED EXISTENCE.

Subject to Article 5, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
corporation and the corporate existence of the Subsidiaries and will refrain or
cause the Subsidiaries to refrain from taking any action that would cause its
corporate existence or the corporate existence of any of the Subsidiaries to
cease, including, without limitation, any action that would result in the
liquidation, winding up or dissolution of it or any of the Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve the
existence of any Subsidiary if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries and that the loss thereof to the Company taken
as a whole is not disadvantageous in any material respect to the Holders.

SECTION 4.4 REPORTS.

(a) The Company shall file with the Trustee copies of all reports and other
information and documents that the Company is required to file with the SEC
pursuant to the Exchange Act. Each such report or other information or document
shall be filed with the Trustee within 15 days after filing of such report or
other information or document with the SEC. The Company will mail or cause to be
mailed to all Holders copies of all of (a) its annual reports to stockholders
and (b) quarterly reports to stockholders which are mailed to its institutional
stockholders.

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(b) If the Company is at any time no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will
prepare (i) for the first three quarters of each fiscal year of the Company,
quarterly financial statements substantially equivalent to the financial
statements required to be included in a report on Form 10-Q under the Exchange
Act, and (ii) annually, complete audited consolidated financial statements,
including, but not limited to, a balance sheet, a statement of operations, a
statement of stockholders' equity and all appropriate notes. All such financial
statements will be prepared in accordance with GAAP, except for changes with
which the Company's independent accountants concur and except that quarterly
financial statements may be subject to year-end adjustments. The Company will
file or cause to be filed with the Trustee and will mail or cause to be mailed
to the Holders a copy of such financial statements within 50 days after the end
of each of the first three quarters of each fiscal year of the Company and
within 95 days after the close of each fiscal year of the Company, respectively.
Notwithstanding the foregoing, if the Company is no longer subject to such
reporting requirements by reason of the acquisition of Capital Stock by, or
merger or consolidation of the Company with, a Person which is subject to such
reporting requirements or a Subsidiary of such a Person and such Person has
unconditionally and irrevocably guaranteed payment in full when due of all
amounts payable with respect to the Notes, then the Company need not prepare,
file or mail the financial statements described in this Section 4.4(b);
PROVIDED, HOWEVER, that such Person complies with Section 4.4(a) as if
references therein to the Company were references to such Person.

SECTION 4.5 TAXES.

The Company shall, and shall cause each of the Subsidiaries to, pay or
discharge prior to delinquency all taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings.

SECTION 4.6 CHANGE OF CONTROL.

(a) In the event of a Change of Control, the Company shall give or cause to
be given written notice in the form of an Officers' Certificate (the "CHANGE OF
CONTROL NOTICE") to all Holders, the Trustee and the Paying Agent of such event
and shall make an offer to purchase (as the same may be extended in accordance
with applicable law, the "CHANGE OF CONTROL OFFER") all then outstanding Notes
at a purchase price equal to 100% of the principal amount thereof plus accrued
and unpaid interest thereon to the Change of Control Payment Date. The Change of
Control Notice shall be given in accordance with Section 13.2 and the Change of
Control Offer shall be made not more than 30 days following the date of the
Change of Control (the "CHANGE OF CONTROL DATE"), unless the

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Company has previously given a notice of optional redemption by the Company of
all of the Notes in accordance with this Indenture. The Change of Control Notice
shall set forth:

(i) that a Change of Control has occurred and, unless the Notes are
subject to a notice of optional redemption described above, that
the Company is offering to repurchase all of the outstanding
Notes;

(ii) a brief description of such Change of Control and, to the extent
readily available to the Company, information with respect to
pro forma consolidated income, cash flow and capitalization of
the Company after giving effect to such Change of Control and
such other financial information relating to the Company with
respect to such Change of Control as the Company may, in its
sole discretion, deem relevant to a decision whether to convert
or hold Notes or tender Notes in connection with such Change of
Control Offer;

(iii) the repurchase price (the "CHANGE OF CONTROL PAYMENT");

(iv) the expiration date of the Change of Control Offer, which shall
be no earlier than 30 days nor later than 60 days from the date
the Change of Control Notice is mailed;

(v) the date such purchase shall be effected, which shall be no
later than 30 days after the expiration date of the Change of
Control Offer (the "CHANGE OF CONTROL PAYMENT DATE");

(vi) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes or portions thereof accepted for
payment pursuant to the Change of Control Offer shall cease to
accrue interest on and after the Change of Control Payment Date;

(vii) the Conversion Price;

(viii) the name and address of the Paying Agent and the Conversion
Agent;

(ix) that Notes (duly endorsed for transfer to the Company), together
with the form of "Option of Holder to Elect Repurchase" thereon
completed and signed, must be surrendered to the Paying Agent
prior to

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the expiration of the Change of Control Offer to collect the
Change of Control Payment; and

(x) any other information required by applicable law to be included
therein and any other procedures that a Holder must follow in
order to have Notes repurchased.

(b) The Change of Control Offer shall remain open until the close of business
on the expiration date of the Change of Control Offer. Each Holder shall have
the right to withdraw his tender in accordance with applicable rules promulgated
by the SEC under the Exchange Act.

(c) In the event that the Company is required to make a Change of Control
Offer, the Company will comply with any applicable securities laws and
regulations, including, to the extent applicable, Section 14(e) of, and Rule
14e-1 and any other tender offer rules under, the Exchange Act.

(d) On the Change of Control Payment Date, the Company shall, to the extent
lawful:

(i) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer;

(ii) deposit with the Paying Agent in immediately available funds an
amount equal to the Change of Control Payment with respect to all
Notes or portions thereof so accepted; and

(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the Notes
or portions thereof tendered to the Company.

(e) The Paying Agent shall promptly (but in any case not later than five
Business Days after the Change of Control Payment Date) mail to each Holder of
Notes so accepted payment in an amount equal to the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail to each
Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered by such Holder, if any; PROVIDED, that each such new Note
shall be in principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of all repurchases pursuant to this
Section 4.6 on or as soon as practicable after the Change of Control Payment
Date.

The Company shall not, and shall not permit any of its Subsidiaries other
than Unrestricted Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any encumbrance or restriction of any kind on the ability of
any Subsidiary other than Unrestricted Subsidiaries to (a) pay to the Company
dividends or make to the Company any other distribution of its Capital Stock,
(b) pay any debt owed to the Company or any other Subsidiary, (c) make loans or
advances to the Company or any other Subsidiary, or (d) transfer any of its
property or assets to the Company or any other Subsidiary, other than such
encumbrances or restrictions existing or created under or by reason of (i)
applicable laws, (ii) this Indenture, (iii) covenants or restrictions contained
in any instrument governing debt of the Company or any of the Subsidiaries
existing on this date of the Indenture or hereafter, (iv) customary provisions
restricting subletting, assignment and transfer of any lease governing a
leasehold interest of the Company or any of the Subsidiaries or in any license
or other agreement entered into in the ordinary course of business, (v) any
agreement governing debt of a person acquired by the Company or any of the
Subsidiaries in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrances or restrictions are not applicable to
any Person, or the property or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired, or (vi) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement entered into in
accordance with the terms of this Indenture for the sale or disposition of
Capital Stock or property or assets of such Subsidiary, pending the closing of
such sale or disposition.

SECTION 4.8 COMPLIANCE CERTIFICATE.

The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company, an Officers' Certificate stating that a review
of the activities of the Company and the Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officer with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to such
Officer, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant and condition
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto), and that, to the
best of his or her knowledge, no event has occurred and remains in existence by
reason of which payments on account of the Principal of or interest on the Notes
are prohibited.

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SECTION 4.9 FURTHER ASSURANCE TO THE TRUSTEE.

The Company shall, upon reasonable request of the Trustee, execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the provisions of this
Indenture.

ARTICLE 5.

SUCCESSORS

SECTION 5.1 WHEN COMPANY MAY MERGE OR SELL ASSETS.

The Company shall not consolidate with or merge into, or sell, lease, convey,
transfer or otherwise dispose of all or substantially all of its assets to, any
Person, without the consent of Holders of the majority in aggregate principal
amount of Notes then outstanding, unless:

(a) the Company is the continuing corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, lease, conveyance, transfer or other disposition of assets
shall have been made, is organized and existing under the laws of the United
States, any state thereof or the District of Columbia and such Person (if other
than the Company) expressly assumes by supplemental indenture executed and
delivered to the Trustee and in a form reasonably satisfactory to the Trustee,
all the obligations of the Company under the Notes and this Indenture,
including, without limitation, conversion rights in accordance with Article 10;

(b) immediately before and immediately after giving effect to such
transaction no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing;

(c) immediately after giving effect to such transaction, the Notes and this
Indenture (as supplemented by such supplemental indenture) will be valid and
enforceable obligations of the Company or such successor; and

(d) the Company shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such proposed transaction and such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent therein provided for relating to such
transaction have been satisfied.

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SECTION 5.2 SUCCESSOR SUBSTITUTED.

Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the Person formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance,
transfer or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor Person has been named as the Company
herein; PROVIDED, HOWEVER, that in the case of a sale, lease, conveyance or
other disposition the Company shall not be released from the obligation to pay
the Principal of and interest on the Notes.

ARTICLE 6.

DEFAULTS AND REMEDIES

SECTION 6.1 EVENTS OF DEFAULT.

The following shall constitute an "EVENT OF DEFAULT":

(a) failure to pay any Principal or repurchase price, if any, of any Note
when due and payable, whether at maturity, upon redemption, upon a Change of
Control Offer or otherwise, whether or not such payment is prohibited by the
subordination provisions of this Indenture;

(b) failure to pay any interest on any Note when due and payable, which
failure continues for 30 days, whether or not such payment is prohibited by the
subordination provisions of this Indenture;

(c) failure to perform the other covenants of the Company in this Indenture,
which failure continues for 90 days after written notice as provided in the last
paragraph of this Section 6.1;

(d) a default occurs (after giving effect to any applicable grace periods or
any extension of any maturity date) in the payment when due of Principal of, or
an acceleration of, any indebtedness for money borrowed by the Company or any
Subsidiary in excess of $5.0 million, individually or in the aggregate, if such
indebtedness is not discharged, or such acceleration is not annulled, within 10
days after written notice as provided in the last paragraph of this Section 6.1;

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(e) the Company or any Significant Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:

(i) commences a voluntary case,

(ii) consents to the entry of an order for relief against it in an
involuntary case,

(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, and such Custodian is not
discharged within 30 days,

(iv) makes a general assignment for the benefit of its creditors, or

(v) admits in writing that it is generally unable to pay its debts as
the same become due;

(f) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(i) is for relief in an involuntary case against the Company or any
Significant Subsidiary,

(ii) appoints a Custodian of the Company or any Significant Subsidiary
or for all or substantially all of the property of the Company or
any Significant Subsidiary, or

(iii) orders the liquidation of the Company or any Significant
Subsidiary,

and, in each case, the order or decree remains unstayed and in effect for 60
consecutive days.

The term "BANKRUPTCY LAW" means Title 11 of the U.S. Code or any similar
federal, foreign or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, examiner or similar official
under any Bankruptcy Law. The term "SIGNIFICANT SUBSIDIARY" has the same meaning
as significant subsidiary has under Regulation S-X under the Securities Act as
in effect on the date hereof.

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A Default under clause (c) of this Section 6.1 (other than a Default under
Section 5.1, which Default shall be an Event of Default with the notice but
without the passage of time specified in clause (c) of this Section 6.1) or
clause (d) of this Section 6.1 shall not be an Event of Default until (i) the
Trustee shall have notified the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding shall have notified the
Company and the Trustee, of the Default and (ii) the Company shall have failed
to cure the Default under such clause (c) within 90 days after receipt of the
notice or under such clause (d) within 10 days after receipt of the notice,
respectively. Any such notice must specify the Default, demand that it be
remedied and state that the notice is a "NOTICE OF DEFAULT."

SECTION 6.2 ACCELERATION.

If an Event of Default (other than an Event of Default specified in clauses
(e) and (f) of Section 6.1) occurs and is continuing, the Trustee (by notice to
the Company), or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding (by notice to the Company and the Trustee), may
declare the unpaid Principal of and accrued interest on all the Notes then
outstanding to be due and payable. Upon any such declaration, such Principal and
accrued interest shall be due and payable immediately. If an Event of Default
specified in clause (e) or (f) of Section 6.1 occurs, such an amount shall IPSO
FACTO become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder. After such acceleration, but
before a judgment or decree based on acceleration, the Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if (a) the Company
has paid or deposited with the Trustee a sum sufficient to pay (i) all overdue
interest on all Notes then outstanding and (ii) the Principal or repurchase
price, if any, of the Notes then outstanding which have become due otherwise
than by such declaration of acceleration and accrued interest thereon at a rate
borne by the Notes and (b) the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived except
nonpayment of Principal or interest that has become due solely because of the
acceleration. No such decision shall affect any subsequent Default or impair any
right consequent thereto.

SECTION 6.3 OTHER REMEDIES.

If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of Principal or repurchase price, if
any, of or interest on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.

27

The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.

SECTION 6.4 WAIVER OF EXISTING AND PAST DEFAULTS.

The Holders of a majority in aggregate principal amount of the Notes then
outstanding held by Persons who are not Affiliates of the Company by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except (i) a continuing Default or Event of Default in the payment
of the Principal of or the interest on any Note or (ii) a Default or Event of
Default with respect to a provision that under Section 9.2 cannot be amended
without the consent of each Holder affected. Upon any such waiver, such Default
shall cease to exist and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.

SECTION 6.5 CONTROL BY MAJORITY.

Notwithstanding anything contained in Section 6.3 to the contrary, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it; PROVIDED, HOWEVER, that the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture or that the
Trustee determines is unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; PROVIDED FURTHER, HOWEVER, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

Prior to taking any action or following any direction pursuant to this
Article 6, the Trustee shall be entitled to request indemnification satisfactory
to it in its sole discretion against any loss or expense caused by taking such
action or following such direction. If the Trustee makes such request, it shall
be entitled to delay taking such action or following such direction until it has
received such indemnification.

SECTION 6.6 LIMITATION ON SUITS.

A Holder may pursue a remedy with respect to this Indenture or the Notes only
if:

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(a) the Holder gives to the Trustee notice of a continuing Event of
Default;

(b) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding make a written request to the Trustee to pursue the
remedy;

(c) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;

(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and

(e) during such 60-day period the Holders of a majority in aggregate
principal amount of the Notes then outstanding do not give the Trustee a
direction inconsistent with the request.

A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.

SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of Principal or repurchase price, if any, of
and interest on such Note, on or after the respective due dates expressed in the
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to bring suit for the enforcement of the right to convert such
Note shall not be impaired or affected without the consent of such Holder.

SECTION 6.8 COLLECTION SUIT BY TRUSTEE.

If an Event of Default specified in Section 6.1(a) or 6.1(b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of Principal or
repurchase price, if any, of and interest accrued on the Notes and interest on
overdue Principal or repurchase price, if any, of and accrued interest on the
Notes and for such further amount as shall be sufficient to cover the costs and,
to the extent lawful, expenses of collection, including the reasonable

29

compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel.

SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.

The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Except as provided in this Indenture, nothing
contained herein shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder or to authorize the Trustee to vote with respect to the
claim of any Holder in any such proceeding.

SECTION 6.10 PRIORITIES.

If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:

First: to the Trustee for amounts due under Section 6.8 or 7.7;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
Third: to Holders for amounts due and unpaid on the Notes for Principal
and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for Principal
and interest, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders
and, if it does so, will give prompt prior written notice thereof to the
Registrar.

At least 15 days before any such record date, the Trustee shall give or cause
to be given to each Holder a notice that states such record date, such payment
date and the amount to be paid.

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SECTION 6.11 UNDERTAKING FOR COSTS.

In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7, or a suit by Holders of more than 10% in aggregate principal amount of the
then outstanding Notes or any suit for the enforcement of the right to convert
any Note in accordance with Article 10.

ARTICLE 7.

TRUSTEE

SECTION 7.1 DUTIES OF TRUSTEE.

(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.

(b) Except during the continuance of an Event of Default:

(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture or the TIA and no others; and

(ii) in the absence of gross negligence, willful misconduct or bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture, but the Trustee need not verify the contents
thereof.

(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

31

(i) this Section 7. l(c) does not limit the effect of Section 7. l(b);

(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.5.

(d) Every provision of this Indenture that in any way relates to the Trustee
is subject to the provisions of the TIA and Sections 7.1(a), 7.1(b), 7.1(c) and
7.1(e).

(e) The Trustee may refuse to perform any duty or exercise any right or power
hereunder unless it receives indemnity satisfactory to it against any loss,
liability or expense.

(f) The Trustee shall not be liable for interest on any money received by it
hereunder, except as the Trustee may agree in writing with the Company. Money
held by the Trustee in trust hereunder need not be segregated from other funds,
except to the extent required by law.

SECTION 7.2 RIGHTS OF TRUSTEE.

(a) The Trustee may conclusively rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters to the extent reasonably deemed necessary by it.

(b) Before the Trustee acts or refrains from acting pursuant to the terms of
this Indenture or otherwise, it may require an Officers' Certificate or an
Opinion of Counsel, or both. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel.

(c) The Trustee may act through agents and attorneys and shall not be
responsible for the willful misconduct or gross negligence of any agents and
attorneys appointed with due care.

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(d) Subject to the provisions of Section 7.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers conferred by this Indenture.

SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.

The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights. However, the Trustee is subject to and must comply
with Sections 7.10 and 7.11.

SECTION 7.4 TRUSTEE'S DISCLAIMER.

The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, it shall not be accountable for the Company's use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Company in this Indenture or any statement in the Notes other than its
authentication.

SECTION 7.5 NOTICE OF DEFAULTS.

If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to each Holder a notice of
the Default or Event of Default within 90 days after it occurs, unless such
Default or Event of Default shall have been cured or waived. Except in the case
of a Default or Event of Default in payment on any Note under Section 6. l(a) or
6. l(b), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the best interests of Holders.

SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.

Within 60 days after each _________, commencing ____________, the Trustee
shall mail to each Holder, at the Company's expense, a brief report dated as of
such reporting date that complies with TIA ss. 313(a) (but if no event described
in TIA ss. 313(a) has occurred within the 12 months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2) to the extent applicable. The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).

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A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each stock exchange or market on which the Notes are listed or
admitted to trading. The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange or admitted to trading on any market and
of any delisting thereof.

SECTION 7.7 COMPENSATION AND INDEMNITY.

The Company shall pay to the Trustee (in its capacities as Trustee,
Conversion Agent, Paying Agent and Registrar) from time to time such
compensation as may be agreed in writing between the Company and the Trustee for
its services hereunder. The Trustee's compensation shall not be (to the extent
permitted by law) limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in accordance with any provision of this
Indenture. Such expenses may include the reasonable compensation and
out-of-pocket expenses of the Trustee's agents and counsel, except such
disbursements, advances and expenses as may be attributable to its negligence,
willful misconduct or bad faith. Any "float" earned on any money disbursed
hereunder shall be considered additional compensation to the Trustee.

The Company shall indemnify the Trustee (in its capacity as Trustee,
Conversion Agent, Paying Agent and Registrar) and each of its officers,
directors, attorneys-in-fact and agents for, and hold each of such Persons
harmless against, any claim, demand, expense (including, but not limited to,
reasonable disbursements and expenses of the Trustee's agents and counsel), loss
or liability incurred by any of them without negligence, willful misconduct or
bad faith on such Person's part, arising out of or in connection with the
administration of this trust and the rights or duties of the Trustee hereunder,
including the costs and expenses of such Person's defense against any claim or
liability in connection with the exercise or performance of any of the Trustee's
powers or duties hereunder. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall provide reasonable cooperation at
the Company's expense in the defense. The Trustee may engage separate counsel at
its own expense and participate in the defense, provided that the Company shall
bear the reasonable expenses of such separate counsel which is reasonably
acceptable to the Company if the defendants regarding such claim include both
the Trustee and the Company and the Trustee shall have been advised by such
separate counsel that representation of the Trustee and the Company would be
inappropriate under applicable standards of professional responsibility due to
actual or potential differing interests between them. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
The

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Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.

The Company's payment obligations pursuant to this Section 7.7 shall survive
the discharge of this Indenture. When the Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.1(e) or 6.1(f) occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

SECTION 7.8 REPLACEMENT OF TRUSTEE.

A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.

The Trustee may resign by so notifying the Company in writing at least 30
days prior to the date of the proposed resignation; PROVIDED, HOWEVER, that no
such resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.8. The Holders of a majority in aggregate
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company.

The Company shall remove the Trustee if:

(a) the Trustee fails to comply with Section 7.10;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a Custodian or public officer takes charge of the Trustee or its
property; or

(d) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trustee.

If a successor Trustee is not appointed or does not take office within 30
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

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If the Trustee fails to comply with Section 7.10, any Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to
the retiring Trustee and to the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee. Notwithstanding the replacement of the Trustee pursuant to
this Section 7.8, the Company's obligations under Section 7.7 shall continue for
the benefit of the retiring Trustee with respect to expenses and liabilities
incurred by it prior to such replacement.

SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER.

Except as otherwise provided in Section 7.8(a) or 7.8(d), if the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.

SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.

This Indenture shall always have a Trustee who satisfies the requirements of
TIA ss. 310(a). The Trustee shall always have a combined capital and surplus as
stated in its most recent published annual report of condition of at least $100
million. The Trustee shall comply with TIA ss. 310(b). In the event the Trustee
shall cease to be eligible in accordance with this Section 7.10, the Trustee
shall resign immediately in the manner and with the effect specified in Section
7.8.

SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.

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ARTICLE 8.

DISCHARGE OF INDENTURE

SECTION 8.1 TERMINATION OF COMPANY'S OBLIGATIONS.

This Indenture shall cease to be of further effect (except that the Company's
obligations under Sections 7.7 and 8.2 shall survive) when all outstanding Notes
theretofore authenticated and issued (other than destroyed, lost or stolen Notes
which have been replaced or paid) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable hereunder.

SECTION 8.2 REPAYMENT TO COMPANY.

The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.

The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money held by them for the payment of Principal,
repurchase price or interest that remains unclaimed for one year after the date
upon which such payment shall have become due; PROVIDED, HOWEVER, that the
Company shall have first caused notice of such payment to the Company to be
mailed to each Holder entitled thereto no less than 30 days prior to such
payment. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.

ARTICLE 9.

AMENDMENTS

SECTION 9.1 WITHOUT CONSENT OF HOLDERS.

The Company and the Trustee may amend this Indenture or the Notes without the
consent of any Holder:

(a) to cure any ambiguity, defect or inconsistency; provided, that such
amendment does not in the opinion of the Trustee adversely affect the rights of
any Holder;

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(b) to comply with Section 5.1 or 10.5;

(c) to provide for uncertificated Notes in addition to or in lieu of
certificated Notes;

(d) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders, and to
make the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture or in the Notes as herein set forth;

(e) to change the place of payment of Principal or repurchase price, if any,
of or interest on the Notes, PROVIDED, that such new place of payment is located
within the 48 contiguous continental States of the United States;

(f) to make any change that does not adversely affect the rights hereunder of
any Holder; or

(g) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;

PROVIDED, HOWEVER, that, in each case, the Company has delivered to the Trustee
an Opinion of Counsel and an Officers' Certificate, each stating that such
amendment complies with the provisions of this Section 9.1.

SECTION 9.2 WITH CONSENT OF HOLDERS.

Subject to the provisions of Sections 6.4 and 6.7, the Company and the
Trustee may amend or modify this Indenture or the Notes with the written consent
of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes held by Persons other than Affiliates of the Company, and the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes; PROVIDED, HOWEVER, that, without
the consent of each Holder affected, an amendment, modification or waiver under
this Section 9.2 may not (with respect to any Notes held by a nonconsenting
Holder):

(a) change the stated maturity of, or any installment of interest on, or
waive a default in the payment of Principal or repurchase price, if any, of or
interest on any Note;

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(b) reduce the principal amount of any Note or reduce the rate or extend the
time of payment of interest on any Note;

(c) increase the Conversion Price (other than in connection with a
combination described in Section 10.4(a)(iii));

(d) except as otherwise provided in Section 9.1(e), change the place or
currency of payment of Principal or repurchase price, if any, of or interest on
any Note;

(e) impair the right to institute suit for the enforcement of any payment on
or with respect to any Note;

(f) adversely affect the right to exchange or convert Notes;

(g) reduce the percentage of the aggregate principal amount of outstanding
Notes, the consent of the Holders of which is necessary to amend this Section
9.2, consent to a merger, consolidation or conveyance, sale, transfer or lease
of assets as described in Section 5.1 or modify or amend any other provision of
this Indenture;

(h) reduce the percentage of the aggregate principal amount of outstanding
Notes, the consent of the Holders of which is necessary for waiver of compliance
with certain provisions of this Indenture or for waiver of certain defaults;

(i) modify the provisions of this Indenture with respect to the subordination
of the Notes in a manner adverse to the Holders;

(j) except as otherwise permitted under Article 5, consent to the assignment
or transfer by the Company of any of its rights and obligations under this
Indenture;

(k) modify the provisions of this Indenture with respect to the obligations
of the Company to repurchase Notes in a manner adverse to the Holders.

To secure a consent of the Holders under this Section 9.2, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.

After an amendment or waiver under this Section 9.2 becomes effective, the
Company shall mail to Holders a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any defect therein,
shall not, however, in any way, impair or affect the validity of any such
amendment or waiver.

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SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.

Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.

SECTION 9.4 REVOCATION AND EFFECT OF CONSENT.

Until an amendment, supplemental indenture or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by such Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as such consenting Holder's Note, even if notation of the consent is not
made on any Note. However, prior to becoming effective, any such Holder or
subsequent Holder may revoke the consent as to its Notes or a portion thereof if
the Trustee receives written notice of revocation before the consent of Holders
of the requisite aggregate principal amount of Notes then outstanding has been
obtained and not revoked.

The Company may, but shall not be obligated to, fix a record date pursuant to
Section 12.1 for the purpose of determining the Holders entitled to consent to
any amendment or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to revoke
any consent previously given, whether or not such Persons continue to be Holders
after such record date. No consent shall be valid or effective for more than 90
days after such record date unless consents from Holders of the principal amount
of Notes required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.

After an amendment or waiver becomes effective it shall bind every Holder,
unless it is of the type described in any of clauses (a) through (k) of Section
9.2. In such case, the amendment or waiver shall bind each Holder of a Note who
has consented to it and every subsequent Holder of a Note that evidences the
same debt as the consenting Holder's Note.

SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.

The Trustee (in accordance with the written direction of the Company) may (at
the Company's expense) place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.

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Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.

SECTION 9.6 TRUSTEE PROTECTED.

The Trustee shall sign all supplemental indentures authorized by this
Indenture, except that the Trustee need not sign any supplemental indenture that
adversely affects its rights. In signing or refusing to sign such supplemental
indenture, the Trustee shall be entitled to receive an Officers' Certificate and
Opinion of Counsel to the effect that such supplemental indenture is authorized
or permitted by this Indenture and will be valid and binding on the Company in
accordance with its terms.

ARTICLE 10.

CONVERSION

SECTION 10.1 CONVERSION PRIVILEGE.

Each Holder may, at such Holder's option, at any time prior to the close of
business on _________, 2004, unless earlier redeemed or repurchased, convert
such Holder's Notes, in whole or in part (in denominations of $1,000 or
multiples thereof), at 100% of the principal amount so converted, into shares of
Common Stock at a conversion price per share equal to $_____ as such conversion
price may be adjusted from time to time in accordance with this Article 10 (the
"CONVERSION PRICE").

SECTION 10.2 CONVERSION PROCEDURE.

To convert a Note, the Holder thereof must (1) complete and sign the "Form of
Election to Convert" thereon (unless such Holder is The Depository Trust Company
("DTC") or its nominee, in which case the customary procedures of DTC will
apply), (2) surrender such Note to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Registrar or the
Conversion Agent, (4) pay any transfer or similar tax if required by Section
10.6, and (5) make any payment required by the first proviso to the third
sentence of this paragraph. The Company's delivery to the Holder of a fixed
number of shares of Common Stock (and any cash in lieu of fractional shares of
Common Stock into which such Note is converted) shall be deemed to satisfy the
Company's obligation to pay the principal amount of such Note and, except as

41

provided in the next sentence, all accrued interest on such Note. If such Note
(including a Note which has been called for redemption and even if a Change of
Control Offer has been made) is converted after a regular interest payment
record date and prior to the related Interest Payment Date, the full interest
installment on such Note scheduled to be paid on such Interest Payment Date
shall be payable on such Interest Payment Date to the Holder of record at the
close of business on such record date; PROVIDED, HOWEVER, that if such record
date is on or after _______, 2000, such Note must be accompanied by a payment
equal to the interest on such Note (or portion thereof converted) payable by the
Company on such Interest Payment Date, which payment will be returned to such
Holder if the Company defaults in the payment of such interest.

As promptly as practicable after the surrender of a Note in compliance with
this Section 10.2, the Company shall issue and deliver at the office or agency
of the Registrar or the Conversion Agent to such Holder, or on such Holder's
written order, a certificate or certificates for the full number of whole shares
of Common Stock issuable upon the conversion of such Note in accordance with the
provisions of this Article 10 and a check or cash with respect to any fractional
share of Common Stock arising upon such conversion as provided in Section 10.3.
In case any Note of a denomination greater than $1,000 shall be surrendered for
partial conversion, then, subject to Article 2, the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of the Note so
surrendered, without charge to such Holder, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Note.

Each conversion shall be deemed to have been effected on the date on which
such Note shall have been surrendered in compliance with this Section 10.2, and
the Person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares of Common Stock represented thereby
for all purposes; PROVIDED, HOWEVER, that no surrender of a Note on any date
when the stock transfer books of the Company shall be closed shall be effective
to constitute the Person or Persons entitled to receive such shares upon such
conversion as the record holder or holders of such shares on such date, but such
surrender shall be effective to constitute the Person or Persons entitled to
receive such shares as the record holder or holders thereof for all purposes at
the close of business on the next succeeding day on which such stock transfer
books are open and, in any such case, such conversion shall be at the Conversion
Price in effect on the date on which such Note shall have been surrendered.

If the last day on which a Note may be converted is not a Business Day, the
Note may be surrendered to that Conversion Agent on the next succeeding Business
Day.

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Provisions of this Indenture that apply to conversion of all of a Note also
apply to conversion of a portion of such Note.

SECTION 10.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.

No fractional shares of Common Stock or scrip representing fractional shares
of Common Stock shall be issued upon conversion of Notes. If more than one Note
shall be surrendered for conversion at one time by the same Holder, the full
number of whole shares of Common Stock which shall be issuable upon conversion
shall be computed on the basis of the aggregate principal amount of Notes (or
specified portions thereof to the extent permitted hereby) so surrendered. If
any fractional share of Common Stock would be issuable upon the conversion of
any Note or Notes, the Company shall make an adjustment therefor in cash at the
Current Market Price of the Common Stock as of the close of business on the
Business Day prior to such conversion.

SECTION 10.4 ADJUSTMENT OF CONVERSION PRICE.

(a) If the Company shall (i) pay a dividend or other distribution, in Common
Stock, on any class of Capital Stock of the Company or any Subsidiary which is
not wholly owned by the Company, (ii) subdivide the outstanding Common Stock
into a greater number of shares by any means, or (iii) combine the outstanding
Common Stock into a smaller number of shares by any means (including, without
limitation, a reverse stock split), then in each such case the Conversion Price
in effect immediately prior thereto shall be adjusted so that the Holder of any
Note thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock that such Holder would have owned or have been
entitled to receive upon the happening of such event had such Note been
converted immediately prior to the relevant record date or, if there is no such
record date, the effective date of such event. An adjustment made pursuant to
this Section 10.4(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date of
such subdivision or combination, as the case may be.

(b) If the Company shall (i) issue or distribute (at a price per share less
than the Current Market Price per share of such Capital Stock on the date of
such issuance or distribution) Capital Stock generally to holders of Common
Stock or to holders of any class or series of Capital Stock which is convertible
into or exchangeable or exercisable for Common Stock (excluding an issuance or
distribution of Common Stock described in Section 10.4(a)) or (ii) issue or
distribute generally to such holders rights, warrants, options or convertible or
exchangeable securities entitling the holder thereof to subscribe

43

for, purchase, convert into or exchange for Capital Stock at a price per share
less than the Current Market Price per share of such Capital Stock on the date
of issuance or distribution, then, in each such case, at the earliest of (A) the
date the Company enters into a firm contract for such issuance or distribution,
(B) the record date for the determination of stockholders entitled to receive
any such Capital Stock or any such rights, warrants, options or convertible or
exchangeable securities, or (C) the date of actual issuance or distribution of
any such Capital Stock or any such rights, warrants, options or convertible or
exchangeable securities, the Conversion Price shall be reduced by multiplying
the Conversion Price in effect immediately prior to such earliest date by:

(x) if such Capital Stock is Common Stock, a fraction the numerator of which
is the number of shares of Common Stock outstanding on such earliest date
plus the number of shares of Common Stock which could be purchased at the
Current Market Price per share of Common Stock on the date of such issuance
or distribution with the aggregate consideration (based on the Fair Market
Value thereof) received or receivable by the Company either (A) in connection
with such issuance or distribution or (B) upon the conversion, exchange,
purchase or subscription of all such rights, warrants, options or convertible
or exchangeable securities (the "AGGREGATE CONSIDERATION"), and the
denominator of which is the number of shares of Common Stock outstanding on
such earliest date plus the number of shares of Common Stock to be so issued
or distributed or to be issued upon the conversion, exchange, purchase, or
subscription of all such rights, warrants, options or convertible or
exchangeable securities; or

(y) if such Capital Stock is other than Common Stock, a fraction the
numerator of which is the Current Market Price per share of Common Stock on
such earliest date minus an amount equal to (A) the sum of (1) the Current
Market Price per share of such Capital Stock multiplied by the number of
shares of such Capital Stock to be so issued minus (2) the Aggregate
Consideration, divided by (B) the number of shares of Common Stock
outstanding on such date, and the denominator of which is the Current Market
Price per share of Common Stock on such earliest date.

Such adjustment shall be made successively whenever any such Capital Stock,
rights, warrants, options or convertible or exchangeable securities are so
issued or distributed. In determining whether any rights, warrants, options or
convertible or exchangeable securities entitle the holders thereof to subscribe
for, purchase, convert into or exchange for shares of such Capital Stock at less
than such Current Market Price, there shall be taken into account the Fair
Market Value of any consideration received or receivable by the Company for such
rights, warrants, options or convertible or exchangeable securities. If any
right, warrant, option or convertible or exchangeable securities, the issuance
of

44

which resulted in an adjustment in the Conversion Price pursuant to this Section
10.4(b), shall expire and shall not have been exercised, the Conversion Price
shall immediately upon such expiration be recomputed to the Conversion Price
which would have been in effect if such right, warrant, option or convertible or
exchangeable securities had never been distributed or issued. Notwithstanding
anything contained in this paragraph to the contrary, the issuance of Capital
Stock upon the exercise of such rights, warrants or options or the conversion or
exchange of such convertible or exchangeable securities will not cause an
adjustment in the Conversion Price if no such adjustment would have been
required at the time such right, warrant, option or convertible or exchangeable
security was issued or distributed; PROVIDED, HOWEVER, that, if the
consideration payable upon such exercise, conversion or exchange and/or the
Capital Stock receivable thereupon are changed after the time of the issuance or
distribution of such right, warrant, option or convertible or exchangeable
security, then such change shall be deemed to be the expiration thereof without
having been exercised and the issuance or distribution of new options, rights,
warrants or convertible or exchangeable securities.

Notwithstanding anything contained in this Indenture to the contrary,
options, rights or warrants issued or distributed by the Company, including
options, rights or warrants distributed prior to the date of this Indenture to
holders of Common Stock generally which, until the occurrence of a specified
event or events (a "TRIGGER EVENT"), (i) are deemed to be transferred with
Common Stock, (ii) are not exercisable, and (iii) are also issued on a pro rata
basis with respect to future issuances of Common Stock, shall be deemed not to
have been issued or distributed for purposes of this Section 10.4 (and no
adjustment to the Conversion Price under this Section 10.4 will be required)
until the occurrence of the earliest Trigger Event, whereupon such options,
rights and warrants shall be deemed to have been distributed and an adjustment
(if any is required) to the Conversion Price shall be made in accordance with
this Section 10.4(b). If any such option, right or warrant, including any such
options, rights or warrants distributed prior to the date of this Indenture, are
subject to events, upon the occurrence of which such options, rights or warrants
become exercisable to purchase different securities, evidences of indebtedness,
cash, Properties or other assets or different amounts thereof, then the date of
the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new options, rights or warrants
with such new purchase rights (and a termination or expiration of the existing
options, rights or warrants without exercise thereof). In addition, in the event
of any distribution (or deemed distribution) of options, rights or warrants, or
any Trigger Event or other event of the type described in the preceding
sentence, that required (or would have required but for the provisions of
Section 10.4(e)) an adjustment to the Conversion Price under this Section 10.4
which was in fact made and such options, rights or warrants shall thereafter
have been redeemed or repurchased without having been exercised, then the
Conversion Price

45

shall be readjusted upon such redemption or repurchase to give effect to such
distribution, Trigger Event or other event, as the case may be, as though it had
instead been a cash distribution, equal on a per share basis to the result of
the aggregate redemption or repurchase price received by holders of such
options, rights or warrants divided by the number of shares of Common Stock
outstanding as of the date of such repurchase or redemption, made to holders of
Common Stock generally as of the date of such redemption or repurchase.

Notwithstanding anything contained in this Section 10.4(b) to the contrary,
no adjustment shall be made in the Conversion Price pursuant to this Section
10.4(b) with respect to the issuance of Common Stock or options or other rights
to purchase Common Stock pursuant to any employee stock purchase, bonus, award,
grant, option or ownership plan (including, without limitation, an employee
stock ownership plan which is part of an employee benefit plan qualified under
Section 401 of the Internal Revenue Code of 1986, as amended (the "CODE"), an
employee stock option or incentive stock option plan qualified under Section 422
of the Code and a restricted stock plan), including the issuance of Common Stock
upon the exercise of such options; PROVIDED, that, for purposes of this
paragraph, the term "employee" includes directors, consultants and advisors and
the term "plan" means a plan, program or arrangement in which 5 or more Persons
are eligible to participate (or, if only directors of the Company are eligible
to participate and there are fewer than 5 such directors, in which all of such
directors are eligible to participate).

(c) If the Company shall pay or distribute, as a dividend or otherwise,
generally to holders of Common Stock or any class or series of Capital Stock
which is convertible into or exercisable or exchangeable for Common Stock any
assets, Properties or rights (including, without limitation, evidences of
indebtedness of the Company, any Subsidiary or any other Person, cash or Capital
Stock or other securities of the Company, any Subsidiary or any other Person,
but excluding payments and distributions as described in Section 10.4(a) or
10.4(b), dividends and distributions in connection with the liquidation,
dissolution or winding up of the Company in its entirety and distributions
consisting solely of cash described in Section 10.4(d)), then in each such case
the Conversion Price shall be reduced by multiplying the Conversion Price in
effect immediately prior to the date of such payment or distribution by a
fraction, the numerator of which is the Current Market Price per share of Common
Stock on the record date for the determination of stockholders entitled to
receive such payment or distribution less the Fair Market Value per share on
such record date of the assets, Properties or rights so paid or distributed, and
the denominator of which is the Current Market Price per share of Common Stock
on such record date. Such adjustment shall become effective immediately after
such record date. For purposes of this Section 10.4(c), such Fair

46

Market Value per share shall equal the aggregate Fair Market Value on such
record date of the assets, Properties or rights so paid or distributed divided
by the number of shares of Common Stock outstanding on such record date.

(d) If the Company shall, by dividend or otherwise, make a
distribution (other than in connection with the liquidation, dissolution or
winding up of the Company in its entirety), generally to holders of Common Stock
or any class or series of Capital Stock which is convertible into or exercisable
or exchangeable for Common Stock, consisting solely of cash where (x) the sum of
(i) the aggregate amount of such cash plus (ii) the aggregate amount of all cash
so distributed (by dividend or otherwise) to such holders within the 12-month
period ending on the record date for determining stockholders entitled to
receive such distribution with respect to which no adjustment has been made to
the Conversion Price pursuant to this Section 10.4(d) exceeds (y) 10% of the
result of the multiplication of (1) the Current Market Price per share of Common
Stock on such record date times (2) the number of shares of Common Stock
outstanding on such record date, then the Conversion Price shall be reduced,
effective immediately prior to the opening of business on the day following such
record date, by multiplying the Conversion Price in effect immediately prior to
the close of business on the day prior to such record date by a fraction, the
numerator of which is the Current Market Price per share of Common Stock on such
record date less the aggregate amount of cash per share so distributed and the
denominator of which is such Current Market Price; PROVIDED, HOWEVER, that, if
the aggregate amount of cash per share is equal to or greater than such Current
Market Price, then, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon
conversion (with respect to each share of Common Stock issued upon such
conversion and in addition to the Common Stock issuable upon conversion) the
aggregate amount of cash per share such Holder would have received had such
Holder's Note been converted immediately prior to such record date. In no event
shall the Conversion Price be increased pursuant to this Section 10.4(d);
PROVIDED, HOWEVER, that if such distribution is not so made, the Conversion
Price shall be adjusted to be the Conversion Price which would have been in
effect if such distribution had not been declared. For purposes of this
paragraph of this Section 10.4(d), such aggregate amount of cash per share shall
equal such sum divided by the number of shares of Common Stock outstanding on
such record date.

(e) The provisions of this Section 10.4 shall similarly apply to all
successive events of the type described in this Section 10.4. Notwithstanding
anything contained herein to the contrary, no adjustment in the Conversion Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Price then in effect; PROVIDED, HOWEVER, that
any adjustments which by reason of this Section 10.4(e) are not required to be
made shall be carried forward and taken into

47

account in any subsequent adjustment. All calculations under this Article 10
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be, and the Trustee shall be
entitled to rely conclusively thereon. Notwithstanding anything contained in
this Section 10.4 to the contrary, the Company shall be entitled to make such
reductions in the Conversion Price, in addition to those required by this
Section 10.4, as it in its discretion shall determine to be advisable in order
that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable. Except as provided in this Article 10, no adjustment in the
Conversion Price will be made for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the right to
purchase Common Stock or any securities so convertible or exchangeable.

(f) Whenever the Conversion Price is adjusted as provided herein, the Company
shall promptly file with the Trustee and any Conversion Agent other than the
Trustee an Officers' Certificate setting forth the Conversion Price in effect
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Promptly after delivery of such Officers' Certificate, the
Company shall give or cause to be given to each Holder a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which such adjustment becomes effective.

(g) Notwithstanding anything contained herein to the contrary, in any case in
which this Section 10.4 provides that an adjustment in the Conversion Price
shall become effective immediately after a record date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Note converted after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such conversion by reason of
the adjustment required by such event over and above the number of shares of
Common Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder any amount in cash in lieu of any
fractional share of Common Stock pursuant to Section 10.3.

In the event of (i) any reclassification (including, without limitation, a
reclassification effected by means of an exchange or tender offer by the Company
or any Subsidiary) or change of outstanding Common Stock (other than a change in
par value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (ii) any consolidation, merger
or combination of the Company with another corporation as a result of which
holders of Common Stock shall be entitled to receive

48

securities or other Property (including cash) with respect to or in exchange for
Common Stock, or (iii) any sale or conveyance of the Property of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive securities or other
Property (including cash) with respect to or in exchange for Common Stock, then
the Company or the successor or purchasing corporation, as the case may be,
shall enter into a supplemental indenture providing that each Note shall be
convertible into the kind and amount of securities or other Property (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance which the Holder of such Note would have
received if such Note had been converted immediately prior to the effective date
of such reclassification, change, consolidation, merger, combination, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 10.

Whenever a supplemental indenture is entered into as provided herein, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth a brief statement of the
facts requiring such supplemental indenture. Promptly after delivery of such
Officers' Certificate, the Company shall give or cause to be given to each
Holder a notice of the execution of such supplemental indenture.

The provisions of this Section 10.5 shall similarly apply to all successive
events of the type described in this Section 10.5.

SECTION 10.6 TAXES ON SHARES ISSUED.

The issuance of a certificate or certificates on conversions of Notes shall
be made without charge to the Holders of such Notes for any tax or charge with
respect to the issuance thereof. The Company shall not, however, be required to
pay any tax or charge which may be payable with respect to any transfer involved
in the issuance and delivery of a certificate or certificates in any name other
than that of the Holders of such Notes, and the Company shall not be required to
issue or deliver any such certificate or certificates unless and until the
Person or Persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or charge or shall have established to the satisfaction
of the Company that such tax or charge has been paid.

49

SECTION 10.7 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH
GOVERNMENT REQUIREMENTS; LISTING OF COMMON STOCK.

The Company shall reserve, out of its authorized but unissued Common Stock or
its Common Stock held in treasury, sufficient shares of Common Stock to provide
for the conversion of all of the Notes that are outstanding from time to time.

Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock issuable
upon conversion of Notes, the Company will take all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue Common Stock at such adjusted Conversion Price.

The Company covenants that all Common Stock which may be issued upon
conversion of Notes will, upon issuance, be duly authorized, validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issuance and delivery thereof.

The Company covenants that if any Common Stock issued or delivered upon
conversion of Notes hereunder require registration with or approval of any
governmental authority under any applicable federal or state law (excluding
federal or state securities laws) before such Common Stock may be lawfully
issued, the Company will in good faith and as expeditiously as possible endeavor
to secure such registration or approval, as the case may be.

The Company covenants that it will not take any action which would cause the
exemption from the registration of Section 5 of the Securities Act afforded by
Section 3(a)(9) of the Securities Act to be unavailable with respect to the
issuance and delivery of Common Stock upon the conversion of Notes in accordance
with this Indenture.

SECTION 10.8 RESPONSIBILITY OF TRUSTEE REQUIREMENTS.

The Trustee and any other Conversion Agent shall not at any time be under any
duty or responsibility to any Holder to determine whether any fact exists which
may require any adjustment of the Conversion Price or other adjustments, or with
respect to the nature extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making any such adjustment, or with respect to the
correctness thereof. The Trustee and any other Conversion Agent shall not be
accountable with respect to the validity, value, kind or amount of any item at
any time issued or delivered upon the conversion of any

50

Note, and neither the Trustee nor any other Conversion Agent makes any
representations with respect thereto. Subject to Section 7.1, neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to issue, transfer or deliver any item upon the surrender of any Note
for conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article 10. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 10.5,
but, subject to the provisions of Section 7.1, may accept as conclusive evidence
of the correctness of any such provisions, and shall be protected in relying
upon, the Officers' Certificate with respect thereto.

SECTION 10.9 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.

In the event that:

(a) the Company shall declare or authorize any event which could result in an
adjustment in the Conversion Price under Section 10.4 or require the execution
of a supplemental indenture under Section 10.5; or

(b) the Company shall authorize the granting to the holders of Common Stock
generally, of rights, options or warrants to subscribe for or purchase any share
of any class or series of Capital Stock of the Company or any Subsidiary or any
other rights, options or warrants, the reclassification of Common Stock (other
than a subdivision or combination of outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), the combination, consolidation or merger of the Company for which
approval of any stockholders of the Company is required, the sale or transfer of
all or substantially all of the assets of the Company or the voluntary or
involuntary dissolution, liquidation or winding-up of the Company in whole or in
part;

then, in each such case, the Company shall file or cause to be filed with the
Trustee and shall give or cause to be given to each Holder, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of determining the holders of outstanding Common Stock
entitled to participate in such event, the date on which such event is expected
to become effective or occur and the date on which it is expected that holders
of outstanding Common Stock of record shall be entitled to surrender their
shares, or receive any items, in connection with such event. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such event.

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ARTICLE 11.

SUBORDINATION

SECTION 11.1 AGREEMENT TO SUBORDINATE.

The Company covenants and agrees, and each Holder, by such Holder's
acceptance of a Note, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the indebtedness
represented by the Notes and the payment of the Principal and repurchase price,
if any, of and interest on each and all of the Notes are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.

No provision of this Article 11 shall prevent the occurrence of any Default
or Event of Default hereunder.

SECTION 11.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.

In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall first be entitled to receive
payment in full of all amounts due or to become due on or with respect to all
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders are entitled to receive any payment on account
of Principal or repurchase price, if any, of or interest on the Notes, and to
that end the holders of Senior Indebtedness shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, which may be payable or
deliverable with respect to the Notes in any such case, proceeding, liquidation,
dissolution or other winding up or event.

In the event that, notwithstanding the foregoing provisions of this Section
11.2, the Trustee or any Holder shall have received any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the

52

case may be, such Holder, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.

The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an entirety
to another Person upon the terms and conditions set forth in Article 5 shall not
be deemed a dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of the Company
for the purposes of this Section 11.2 if the Person formed by such consolidation
or into which the Company is merged or the Person which acquires by conveyance
or transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article 5.

In the event that any Notes are declared due and payable before their stated
maturity, then and in such event the holders of Senior Indebtedness outstanding
at the time such Notes so become due and payable shall be entitled to receive
payment in full of all amounts due or to become due on or with respect to such
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders are entitled to receive any payment by the
Company on account of the Principal or repurchase price, if any, of or interest
on the Notes or on account of the purchase or other acquisition of Notes.

In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or to any Holder prohibited by the foregoing provision of
this Section 11.3, and if such fact shall, at or prior to the time of such
payment, have been made known to the Trustee by written notice or, as the case
may be such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

The provisions of this Section 11.3 shall not apply to any payment with
respect to which Section 11.2 would be applicable.

53

SECTION 11.4 PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.

(a) In the event and during the continuation of any default in the payment of
principal of or interest on any Senior Indebtedness beyond any applicable grace
period with respect thereto, or in the event that any event of default with
respect to any Senior Indebtedness shall have occurred and be continuing
permitting the holders of such Senior Indebtedness (or a trustee on behalf of
the holders thereof) to declare such Senior indebtedness due and payable prior
to the date on which it would otherwise have become due and payable, unless and
until such event of default shall have been cured or waived or shall have ceased
to exist or the Company and the Trustee shall have received written notice from
the Representative of the Senior Indebtedness with respect to which such event
of default relates approving payment on the Notes, then no payment shall be made
by the Company with respect to the Principal or repurchase price, if any, or
interest on the Notes or to acquire any of the Notes; provided that no such
default will prevent any payment on, or with respect to, the Notes for more than
120 days unless the maturity of such Senior Indebtedness has been accelerated.
Not more than one such 120 day delay may be made in any consecutive 360-day
period, irrespective of the number of defaults with respect to Senior
Indebtedness during such period.

In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or to any Holder prohibited by the foregoing provision of
this Section 11.4, and if such fact shall, at or prior to the time of such
payment, have been made known to the Trustee by written notice or, as the case
may be such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

The provisions of this Section 11.4 shall not apply to any payment with
respect to which Section 11.2 would be applicable.

SECTION 11.5 PAYMENT PERMITTED IF NO DEFAULT.

Nothing contained in this Article 11 or elsewhere in this Indenture or in any
of the Notes shall prevent (a) the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding-up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 11.2 or under the conditions
described in Section 11.3 or 11.4, from making payments at any time of Principal
or repurchase price, if any, of or interest on the Notes or (b) the application
by the Trustee of any money deposited with it hereunder to the payment of or on
account of the Principal or repurchase price, if any, of or interest on the
Notes or the retention of any such payment by the Holders, if, at the time of
the application by the Trustee, it did not have

54

knowledge that such payment would have been prohibited by the provisions of this
Article 11.

SECTION 11.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.

Subject to the payment in full of all Senior Indebtedness, the Holders shall
be subrogated to the extent of the payments or distributions made to the holders
of such Senior Indebtedness pursuant to the provisions of this Article 11
(equally and ratably with the holders of all indebtedness of the Company which
is not Senior Indebtedness and which is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the Principal or repurchase price, if any, of and interest on
the Notes shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of Senior Indebtedness of any cash, property or
securities to which the Holders or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders be deemed to be a payment or distribution by the
Company to or on account of Senior Indebtedness.

SECTION 11.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.

The provisions of this Article 11 are and are intended solely for the purpose
of defining the relative rights of the Holders on the one hand and the holders
of Senior Indebtedness on the other hand. Nothing contained in this Article 11
or elsewhere in this Indenture or in the Notes is intended to or shall: (a)
impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is absolute
and unconditional (and which, subject to the rights under this Article 11 of the
holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders the Principal or
repurchase price, if any, of and interest on the Notes as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders and creditors of the Company
other than the holders of Senior Indebtedness; or (c) prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
11 of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee of such Holder.

55

SECTION 11.8 TRUSTEE TO EFFECTUATE SUBORDINATION.

Each Holder of a Note by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article 11 and appoints the
Trustee his attorney-in-fact for any and all such purposes.

SECTION 11.9 NO WAIVER OF SUBORDINATION PROVISIONS.

No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act by the Company or by any act
or failure to act in good faith, by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.

Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 11 or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.

SECTION 11.10 NOTICE TO TRUSTEE.

The Company shall give prompt written notice to the Trustee of any fact known
to the Company which would prohibit the making of any payment to or by the
Trustee with respect to the Notes. Notwithstanding the provisions of this
Article 11 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee with respect to the Notes, unless and
until the Trustee shall have received written notice thereof from the Company or
a holder of Senior Indebtedness or from any Representative therefor, and, prior
to the receipt of any such written notice, the Trustee,

56

subject to the provisions of Section 7.1, shall be entitled in all respects to
assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall
not have received the notice provided for in this Section 11.10 at least 10
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Note), then,
notwithstanding anything herein contained to the contrary, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it during or after such 10
Business Day period.

Subject to the provisions of Section 7.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a Representative therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a Representative therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

SECTION 11.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.

Upon any payment or distribution of assets of the Company referred to in this
Article 11, the Trustee, subject to the provisions of Section 7.1, and the
Holders shall be entitled to rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding-up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.

57

SECTION 11.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.

The Trustee shall not be deemed to owe any fiduciary duty to, or be subject
to any implied covenants or obligations in favor of, the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders or to the Company or to any
other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 11 or otherwise.

The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 11 with respect to any Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.

Nothing in this Article 11 shall subordinate to Senior Indebtedness the
claims of, or payments to, the Trustee under or pursuant to Section 7.7.

SECTION 11.14 ARTICLE APPLICABLE TO PAYING AGENTS.

In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "TRUSTEE" as
used in this Article 11 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 11 in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Section 11.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.

SECTION 11.15 CERTAIN CONVERSIONS DEEMED PAYMENT.

For the purposes of this Article 11 only, (a) the issuance and delivery of
Junior Securities upon conversion of Notes in accordance with Article 10 shall
not be deemed to constitute a payment or distribution on account of the
Principal or repurchase price, if any, of or interest on Notes or on account of
the purchase or other acquisition of Notes and (b) the payment, issuance or
delivery of cash, property or securities (other than Junior Securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
Principal of such Note. Nothing contained in this Article 11 or elsewhere in
this

58

Indenture or in the Notes is intended to or shall impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders, the
right, which is absolute and unconditional, of a Holder to convert any Note in
accordance with Article 10.

ARTICLE 12.

MEETINGS OF HOLDERS

SECTION 12.1 ACTION BY HOLDERS.

Whenever in this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action, the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Holders in person or by proxy appointed in writing or
(b) by the record of the Holders voting in favor thereof at any meeting of
Holders called and held in accordance with the provisions of this Article 12.
Whenever the Company or the Trustee solicits the taking of action by the
Holders, the Company or the Trustee may fix in advance of such solicitation a
date as the record date for determining Holders entitled to take such action. If
a record date is fixed, those and only those Persons who are Holders at the
record date so fixed, or their proxies, shall be entitled to take such action
regardless of whether they are Holders at the time of such action.

SECTION 12.2 Purposes for Which Meeting May Be Called.

A meeting of Holders may be called at any time and from time to time pursuant
to the provisions of this Article 12 for any of the following purposes:

(a) to give any notice to the Company, or the Trustee, or to give
any directions to the Trustee, or to waive or to consent to the waiving
of any Default hereunder and its consequences, or to take any other
action authorized to be taken by Holders pursuant to any of the
provisions of Article 6;

(b) to remove the Trustee or to appoint a successor Trustee
pursuant to the provisions of Article 7;

59

(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to Section 9.2; or

(d) to take any other action (i) authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or
appropriate in connection with the administration of this Indenture.

SECTION 12.3 MANNER OF CALLING MEETINGS.

The Trustee may at any time call a meeting of Holders to take any action
specified in Section 12.2, to be held at such time and at such place in the City
of New York, New York, or such other place as the Trustee shall determine.
Notice of every meeting of Holders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be given by the Trustee, to the Company and to each Holder not less than
10 nor more than 60 days prior to the date fixed for such meeting.

Any meeting of Holders shall be valid without notice if the Holders of all
Notes then outstanding are present in person or by proxy, or if notice is waived
before or after the meeting by all of the Holders and if the Company and the
Trustee are either present by duly authorized representatives or have, before or
after the meeting, waived notice.

SECTION 12.4 CALL OF MEETINGS BY THE COMPANY OR HOLDERS.

In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Notes then outstanding, shall have requested
the Trustee to call a meeting of Holders to take any action specified in Section
12.2, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have given the notice of
such meeting within 20 days after receipt of such request, then the Company or
the Holders of Notes in the amount above specified may determine the time and
place in the City of New York, New York, for such meeting and may call such
meeting for the purpose of taking such action, by giving or causing to be given
notice thereof as provided in Section 12.3.

60

SECTION 12.5 WHO MAY ATTEND AND VOTE AT MEETINGS.

To be entitled to vote at any meeting of Holders, a person shall be (a) a
Holder on the record date for such meeting or, if there is no such record date,
on the date of such meeting or (b) a Person appointed by an instrument in
writing as proxy for one or more of such Holders.

The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

SECTION 12.6 REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING; VOTING
RIGHTS; ADJOURNMENT.

Notwithstanding any other provision of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders,
in regard to proof of the holding of Notes and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate.

The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or by
Holders as provided in Section 12.4, in which case the Company or the Holders
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote.

At any meeting each Holder or proxy shall be entitled to one vote for each
$1,000 principal amount of Notes held or represented by such Holder or proxy, as
the case may be; PROVIDED, HOWEVER, that no vote shall be cast or counted at any
meeting with respect to any Notes challenged as not outstanding and ruled by the
chairman of the meeting to be not outstanding. The chairman of the meeting shall
have no right to vote other than by virtue of Notes held by such chairman or
instruments in writing as aforesaid duly designating such chairman as the proxy
to vote on behalf of other Holders. At any meeting of Holders, the presence (in
person or by proxy) of Persons holding or representing a majority in aggregate
principal amount of the Notes then outstanding shall be sufficient for a quorum.
Any meeting of Holders duly called pursuant to the

61

provisions of Section 12.3 or 12.4 may be adjourned from time to time by vote of
the Holders of a majority in aggregate principal amount of the Notes represented
at the meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.

SECTION 12.7 VOTING AT THE MEETING AND RECORD TO BE KEPT.

The vote upon any resolution submitted to any meeting of Holders shall be by
written ballots on which shall be subscribed the signatures of the Holders or of
their representatives by proxy and the principal amount of the Notes voted by
the ballot. The permanent chairman of the meeting shall appoint two inspectors
of votes, who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Holders shall be prepared by
the secretary of the meeting and there shall be attached to such record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that such notice was given
as provided in Section 12.3 or 12.4. The record shall be signed and verified by
the affidavits of the permanent chairman and the secretary of the meeting and
one of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the matters
therein stated.

SECTION 12.8 EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE HINDERED OR
DELAYED BY CALL OF MEETING.

Nothing contained in this Article 12 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any of the provisions of this Indenture or of
the Notes.

SECTION 12.9 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).

62

ARTICLE 13.

MISCELLANEOUS

SECTION 13.1 TRUST INDENTURE ACT CONTROLS.

If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required or deemed to be included in this Indenture
by the TIA, the required or deemed provision shall control.

SECTION 13.2 NOTICES.

Any notice or communication by the Company or the Trustee to the other shall
be deemed to have been duly given if given in writing and delivered in person or
mailed by first-class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery addressed as
follows:

The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when

63

receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.

Any notice or communication to a Holder shall be in writing and shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its last address
shown on the Register. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.

If a notice or communication is given in the manner provided above within the
time prescribed, it shall be deemed to have been duly given, whether or not
received by the addressee.

If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.

SECTION 13.3 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent if any, provided for in this
Indenture relating to the proposed action have been complied with; and

(b) at the Trustee's request, an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been
complied with.

SECTION 13.4 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION OF COUNSEL.

Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant in this Indenture shall include:

(a) a statement that each Person executing such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;

64

(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are
based;

(c) a statement that, in the opinion of each such Person, such
examination or investigation has been made as is necessary to enable it
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that an Opinion of Counsel may be based, insofar as it relates
to factual matters, on a certificate or certificates of public
officials, a legal opinion of counsel employed by the Company or a
Subsidiary or a certificate of or representations by an Officer or
Officers unless counsel rendering such Opinion of Counsel actually
knows that such certificate, legal opinion or representation is
erroneous.

SECTION 13.5 RULES BY TRUSTEE AND AGENTS.

The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for its functions.

SECTION 13.6 LEGAL HOLIDAYS.

If a payment date is not a Business Day at a place of payment, payment may be
made at such place of payment on the next succeeding Business Day, and no
additional interest shall accrue for the intervening period.

SECTION 13.7 NO RECOURSE AGAINST OTHERS.

A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or
this Indenture or for any claim based on, with respect to or by reason of such
obligations or their creation including with respect to any certificate
delivered thereunder or hereunder. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release contained in this Section
13.7 are part of the consideration for the Company's issuance of the Notes.

65

SECTION 13.8 COUNTERPARTS.

This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

SECTION 13.9 GOVERNING LAW.

THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND

THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

SECTION 13.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

SECTION 13.11 SUCCESSORS.

All agreements of the Company in this Indenture and the Notes shall bind its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.

SECTION 13.12 SEVERABILITY.

In case any provision of this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

SECTION 13.13 TABLE OF CONTENTS, HEADINGS, ETC.

The Table of Contents and headings of the Articles and Sections have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

66

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
executed as of the day and year first above written.

HEICO CORPORATION

By:

Name:

Title:

Attest:

By:
Name:

Title:

Attest

Name:

67

EXHIBIT A

[Face of Note]

HEICO CORPORATION

__ % CONVERTIBLE SUBORDINATED NOTE DUE 2004

CUSIP No. ________________

No._________ $____________

HEICO CORPORATION promises to pay to

___________________________________________________ _________________________ or

Reference is made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

HEICO CORPORATION

By:_________________________
Chairman

(SEAL)

ATTEST:

By:__________________________
Secretary

Authentication:

This is one of the Notes referred to in the within-mentioned Indenture:

as Trustee

By:____________________________
Authorized Signature

Dated:__________________________

A-1

[Reverse Side]

Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Indenture dated as of ____________, 1997
between Heico Corporation., a Florida corporation, and ___________________, as
trustee, as amended from time to time in accordance with its terms (the
Indenture).

1. INTEREST.

(a) The Company shall pay interest on the outstanding principal
amount of this Note at the rate of __% per annum from the date of original
issuance of any Notes under the Indenture until maturity. The Company will pay
interest semi-annually on ____________ and _____________ of each year commencing
__________, 1998, or if any such day is not a Business Day, on the next
succeeding Business Day. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from the
date of original issuance of any Notes under the Indenture; PROVIDED, HOWEVER,
that if there is no existing Default in the payment of interest and this Note is
authenticated between a record date shown on the face hereof and the net
succeeding Interest Payment Date, interest shall accrue from such net succeeding
Interest Payment Date. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

(b) To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
(i) overdue Principal or repurchase price, if any, of the Notes at the rate
borne by the Notes and (ii) overdue installments of interest on the Notes at the
rate borne by the Notes.

2. METHOD OF PAYMENT. The Company will pay interest (except defaulted
interest) on the Notes to Holders at the close of business on the record date
shown on the face hereof next preceding the applicable Interest Payment Date
(even if such Notes are canceled after such record date and on or before such
Interest Payment Date), except as provided in Section 10.2 of the Indenture.
Defaulted interest shall be paid to Holders as of a special record date
established for purposes of determining the Holders entitled thereto. The Notes
will be payable as to Principal, repurchase price and interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, as set forth in the Indenture, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses set forth in the Register. Such payment shall be in the currency of
the United States of America which at the time of payment is legal tender for
payment of public and private debts.

3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, the Trustee
will act as Paying Agent, Registrar and Conversion Agent. The Company may change
any Paying Agent, Registrar or Conversion Agent without notice to any Holder.
The Company or any Subsidiary may act in any such capacity.

4. INDENTURE. The Company issued the Notes under the Indenture. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the
Trust Indenture Act of 1939 for a statement of such terms. The Notes are general
unsecured obligations of the Company limited to $__________ in aggregate
principal amount, subject to Section 2.7 of the Indenture.

5. OPTIONAL REDEMPTION BY THE COMPANY. The Notes are not subject to
redemption at the option of the Company prior to _________, 2000. Thereafter,
the Notes will be redeemable at any time prior to maturity at the option of the
Company, in whole or in part from time to time, upon not less than 30 days' nor
more than 60 days' prior notice to the Holders at the redemption prices
(expressed as percentages of principal amount) set forth below:

in each case together with accrued but unpaid interest, if any, up to but not
including the redemption date.

6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemptions with respect to the
Notes.

7. REPURCHASE AT THE OPTION OF HOLDER. Upon a Change of Control, the
Company shall offer to repurchase all then outstanding Notes at a repurchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to the Change of Control Payment Date, if any. Within 30 days after a
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture. A Holder may tender or refrain from tendering all or any portion of
such Holder's Notes, at such Holder's discretion, by completing and signing the
form entitled Option of Holder to Elect Repurchase below and delivering such
form, together with the Notes with respect to which the repurchase right is
being exercised, duly endorsed for transfer to the Company, to the Paying Agent.
Any partial tender of Notes must be made in an integral multiple of $1,000.

8. CONVERSION. To convert a Note, the Holder thereof must (i) complete
and sign the "Form of Election to Convert" below (unless such Holder is DTC, in
which case the customary procedures of DTC will apply), (ii) surrender such Note
to the Conversion Agent, (iii) furnish appropriate endorsements and transfer
documents if required by the Registrar or the Conversion Agent, (iv) pay any
transfer or similar tax if required by Section 10.6 of the Indenture and (v)
make the payment described in the net sentence. If this Note (even if this Note
has been called for redemption or a Change of Control Offer has been made) is
converted after a regular interest payment record date and prior to the related
Interest Payment Date, the full interest installment on this Note scheduled to
be paid on such Interest Payment Date shall be payable on such Interest Payment
Date to the Holder of this Note at the close of business on such record date;
PROVIDED, HOWEVER, that if such record date is on or after ____________, 2000,
this Note must be accompanied by a payment equal to the interest on this Note
(or portion thereof converted) payable by the Company on such Interest Payment
Date, which payment will be returned to such Holder if the Company defaults in
the payment of such interest, all as provided in Section 10.2 of the Indenture.
No fractional shares of Common Stock will be issued upon conversion, but an
adjustment in cash will be made, as provided in the Indenture, with respect to
any fractional share which would otherwise be issuable upon conversion. A Holder
is not entitled to any rights of a holder of Common Stock until such Holder has
converted its Notes into Common Stock as provided in the Indenture.

9. SUBORDINATION. The Notes are subordinated to Senior Indebtedness. To
the extent provided in the Indenture, Senior Indebtedness must be paid before
the Notes may be paid. The Company agrees, and each Holder by accepting a Note
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give effect to such provisions, and each Holder
appoints the Trustee its attorney-in-fact for any and all such purposes.

10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. A
Holder may transfer or exchange Notes as provided in the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the exchange
or transfer of any Notes (or portion thereof) during the 15 day period (or
shorter) preceding the mailing of a notice of redemption or any Notes (or
portion thereof) with respect to which a repurchase election has been tendered
and not withdrawn by the Holder thereof in accordance with Section 4.6 of the
Indenture.

11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.

12. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Notes may be amended with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding and
any existing

A-3

Default (except a payment default) may be waived with the consent of the Holders
of at least a majority in aggregate principal amount of the Notes then
outstanding. Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to (i) cure any ambiguity, defect
or inconsistency, provided that such amendment does not in the opinion of the
Trustee adversely affect the rights of any Holder, (ii) provide for
uncertificated Notes in addition to or in lieu of certificated Notes, (iii)
comply with Sections 5.1 and 10.5 of the Indenture, (iv) make any change that
does not adversely affect the rights of any Holder, (v) comply with requirements
of the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, (vi) add to the covenants of the Company and (vii) change the
place of payment of Principal or repurchase price, if any, of or interest on the
Notes (subject to certain limitations set forth in the Indenture).

13. DEFAULTS AND REMEDIES. Events of Default include: (a) failure to
pay any Principal or repurchase price, if any, of any Note when due and payable,
whether at maturity, upon redemption, upon a Change of Control Offer or
otherwise, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) failure to pay any interest on any Note when
due and payable, which failure continues for 30 days, whether or not such
payment is prohibited by the subordination provisions of the Indenture; (c)
failure to perform the other covenants of the Company in the Indenture, which
failure continues for 90 days after written notice as provided in the Indenture;
(d) default in payment when due of Principal of, or acceleration of, any
indebtedness for money borrowed by the Company or any Subsidiary in excess of
$__________, individually or in the aggregate, if such indebtedness is not
discharged, or such acceleration is not annulled, within 10 days after written
notice as provided in the Indenture; and (e) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary. If an
Event of Default shall occur and be continuing, the Trustee or the Holders of at
least 25% in aggregate principal amount of the then outstanding Notes may
accelerate the maturity of all Notes, except that in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes shall immediately so accelerate. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes at the request
or direction of any of the Holders. Subject to certain limitations, the Holders
of a majority in aggregate principal amount of the outstanding Notes will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee. The Company must furnish an annual compliance certificate to the
Trustee.

14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if were not Trustee; PROVIDED, HOWEVER, that if the Trustee
acquires any conflicting interest as described in the Trust Indenture Act of
1939, it must eliminate such conflict or resign.

15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, with respect to, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release contained in Article 13 of the Indenture are
part of the consideration for the Company's issuance of the Notes.

16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).

A-4

The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

Heico Corporation
3000 Taft Street
Hollywood, Florida 33021

Attn:

A-5

FORM OF ELECTION TO CONVERT

I (we) hereby irrevocably exercise the option to convert this Note, or
the portion below designated, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Note, and direct that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned
registered Holder hereof, unless a different name has been indicated below. If
shares are to be issued in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.

Portion of this Note
to be converted (if partial
conversion, $1,000 or an
integral multiple thereof):$_________________

Signature:_______________________________________
(exactly as your name appears on the face
of this Note)

Name:___________________________________________

Title:__________________________________________

Address:________________________________________

Phone No.:______________________________________

Date:___________________________________________

If shares are to be issued and registered in the name of a Person other than the
undersigned, please print he name and address, including zip code, and social
security or other taxpayer identification number of such Person below.

Name:_________________________________

Address:______________________________

TlN/Social Security No: ________________________________

Signature Guaranteed (if Common Stock to be issued to other than registered
holders):

By: ______________________________
This signature shall be guaranteed by an eligible guarantor institution (a bank
or trust company having an office or correspondent in the United States or a
broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc.) with membership in an approved
signature guaranty medallion program pursuant to SEC Rule 17Ad-15.

ASSIGNMENT FORM

A-6

ASSIGNMENT FORM

(I) or (we) assign and transfer this Note to

(Insert assignee's social security or tax I.D. no.)

(Print or type assignee's name, address and zip code)

and irrevocably appoint___________________________________________________agent
to transfer this Note on the Register. The agent may substitute another to act
for him.

Date: __________________

Signature:_____________________________________
(exactly as your name appears on the
face of this Note)

Name:__________________________________________

Title:_________________________________________

Address:_______________________________________

Phone No.:_____________________________________

Date:__________________________________________

Signature Guaranteed:

By: _________________________________________________
This signature shall be guaranteed by an eligible guarantor institution (a bank
or trust company having an office or correspondent in the United States or a
broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc.) with membership in an approved
signature guaranty medallion program pursuant to SEC Rule 17Ad-15.

A-7

OPINION OF HOLDER TO ELECT REPURCHASE

To elect to have all or part of this Note repurchased by the Company
pursuant to Section 4.6 of the Indenture in connection with a Change of Control
Offer, state the amount you elect to have repurchased (if all, write "ALL"):
$________________________.

Your Name:__________________________________
(exactly as your name appears on the
face of this Note)

By:_________________________________________

Title:______________________________________

Date:_______________________________________

Signature Guaranteed:

By:___________________________________
This signature shall be guaranteed by an eligible guarantor institution (a bank
or trust company having an office or correspondent in the United States or a
broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc.) with membership in an approved
signature guaranty medallion program pursuant to SEC Rule 17Ad-15.

This Stock Purchase Agreement ("Agreement") is made as of October 30,
1997, by and among HEICO Aerospace Holdings Corp., a Florida corporation
("Seller"), HEICO Corporation, a Florida corporation ("HEICO") and Lufthansa
Technik AG, a German corporation ("Investor").

RECITALS

Seller desires to sell, and Investor desires to purchase, two hundred
(200) shares representing twenty percent (20%) of the issued and outstanding
shares of common stock ("Shares") of Seller for the consideration and on the
terms set forth in this Agreement.

AGREEMENT

The parties, intending to be legally bound, agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:

"BREACH" -- a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been any inaccuracy
in or breach of, or any failure to perform or comply with, such representation,
warranty, covenant or obligation.

"INVESTOR" -- as defined in the first paragraph of this Agreement.

"CLOSING" -- as defined in Section 2.3.

"CLOSING DATE" -- the date and time as of which the Closing actually takes
place.

"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" -- any cost, damages, expense,
liability, obligation or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:

(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);

(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or

(d) any other compliance, corrective investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health Law.

The terms "removal", "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
compensation, and Liability Act, 42 U.S.C. /section/9601 et seq., as amended
("CERCLA").

(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the commencements
of activities, such as resource extraction or construction, that could have
significant impact on the Environment;

(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;

(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;

(d) assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;

(e) protecting resources, species, or ecological amenities;

(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;

(g) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or

(h) making responsible parties pay private parties, or groups of
them for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.

"ENVIRONMENTAL PERMITS" -- refers to all permits, licenses, authorizations,
certificates and approvals of governmental authorities relating to or required
by Environmental Laws and necessary for the businesses of Seller or any Seller's
Company, as currently conducted.

"EXCHANGE ACT" -- the Securities and Exchange Act of 1934 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.

"FACILITIES" -- any real property, leaseholds, or other interest currently or
formerly owned or operated by any Seller's Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated by any Seller's Company.

"FAA" -- the Federal Aviation Administration of the United States.

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"GAAP" -- generally accepted United states accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in section 3.4(b) were prepared.

"GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.

"GOVERNMENTAL BODY" -- any:

(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;

(b) federal, state, local, municipal, foreign, or other government;

(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);

(d) multi-national organization or body; or

(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.

"HAZARDOUS ACTIVITY" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses and unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or the Seller's
Companies.

"HAZARDOUS MATERIALS" -- includes any (i) "hazardous substance," "pollutants,"
or "contaminant" (as defined in Sections 101(14) and (33) of CERCLA or the
regulations issued pursuant to Section 102 of CERCLA and found at 40 C.F.R.
/section/302), including any element, compound, mixture, solution, or substance
that is or may be designated pursuant to Section 102 of CERCLA; (ii) substance
that is or may be designated pursuant to Section 311(b)(2)(A) of the Federal
Water Pollution Control Act, as amended (33 U.S.C. /section//section/ 6901,
6921) ("RCRA") or having characteristics that may subsequently be considered
under RCRA to constitute a hazardous waste; (iv) substance containing petroleum,
as that term is defined in Section 9001(8) of RCRA; (v) toxic pollutant that is
or may be listed under Section 307(a) of FWPCA; (vi) hazardous air pollutant
that is or may be listed under section 112 of the Clean Air Act, as amended (42
U.S.C. /section//section/ 7401, 7412); (vii) imminently hazardous chemical
substance or mixture with respect to which action has

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been or may be taken pursuant to Section 7 of the Toxic substances Control Act,
as amended (15 U.S.C. /section//section/ 2601, 2606); (viii) source, special
nuclear, or by-product material as defined by the Atomic Energy Act of 1954, as
amended (42 U.S.C. /section/ 2011 et seq.); (ix) asbestos, asbestos-containing
material, or urea formaldehyde or material that contains it; (x) waste oil and
other petroleum products; and (xii) any other toxic materials, contaminants, or
hazardous substances or wastes pursuant to any Environmental Law.

"INDEMNIFIED PERSONS" -- as defined in Section 5.2.

"INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 3.13.

"INTERIM BALANCE SHEET" -- as defined in Section 3.4.

"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a particular
fact or other matter if:

(a) such individual is actually aware of such fact or other matter; or

(b) such individual as an officer or director of a public company
should be aware of or should have knowledge of such fact or other matter under
applicable U.S. federal securities laws.

"KNOWLEDGE OF SELLER, ANY SELLER'S COMPANY, AND HEICO" -- the Knowledge of
Laurans Mendelson, Eric Mendelson, Victor Mendelson, Thomas Irwin or James Reum.

"OCCUPATIONAL SAFETY AND HEALTH LAW" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.

"ORDER" -- any award, decision, injunction, judgment, order, ruling, subpoena,
or verdict entered, issued, made, or rendered by any court, administrative
agency, or other Governmental Body or by any arbitrator.

"ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day operations of such
Person; or

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(b) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any individual or group of individuals exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that are in
similar lines of business as such Person.

"ORGANIZATIONAL DOCUMENTS" -- the articles or certificate of incorporation and
the bylaws of a corporation and any amendment to any of the foregoing.

"PRE-CLOSING ENVIRONMENTAL LIABILITIES" -- (i) any conditions existing prior to
the Closing Date on any property (whether real, personal, or mixed and whether
tangible or intangible) owned, leased or operated by Seller, or any Seller's
Company which violates an Environmental Law in effect on the Closing Date, (ii)
a Release of a Hazardous Material on any property (whether real, personal, or
mixed and whether tangible or intangible) owned, leased or operated by Seller,
or any Seller's Company which violates an Environmental Law in effect on the
Closing Date or any Release of a Hazardous Material wherever located which any
of such parties may be held responsible, and (iii) any operation of the business
by Seller or any Seller's Company prior to the Closing Date which violates an
Environmental Law in effect on the Closing Date.

(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;

(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and

(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).

With respect to a specified Person other than an individual:

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(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;

(b) any Person that holds a Material Interest in such specified Person;

(c) each Person that serves as a director, officer, partner, executor,
or trustee of such specified Person (or in a similar capacity);

(d) any Person in which such specified Person holds a Material
Interest;

(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and

(f) any Related Person of any individual described in clause (b) or
(c).

For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent
(10%) of the outstanding equity securities or equity interest in a Person.

"REPRESENTATIVE" -- with respect to a particular Person, any director, officer,
employee, agent consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.

"RESEARCH AND DEVELOPMENT COOPERATION AGREEMENT" -- the research and development
cooperation agreement by and between the Seller and Investor of even date
herewith.

"SECURITIES ACT" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.

"SELLER'S COMPANIES" -- the Seller and its Subsidiaries, collectively.

"SHAREHOLDERS AGREEMENT" -- the shareholders agreement by and between Seller,
Investor and HEICO of even date herewith.

"SHARES" -- as defined in the Recitals of this Agreement.

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"SUBSIDIARY" -- with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interest having such power only upon the happening of a contingency that has not
occurred) are held by the Owner or one or more of its Subsidiaries; when used
without reference to a particular Person, "Subsidiary" means a Subsidiary of the
Seller.

"TAX" -- (and, with correlative meaning, "Taxes" and "Taxable") means (A) any
net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding on amounts
paid, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any governmental authority (hereinafter a "Taxing Authority")
responsible for the imposition of any such tax (domestic or foreign).

"TAX ALLOCATION AND SHARING AGREEMENT" -- the tax allocation and sharing
agreement by and between the HEICO and Seller of even date herewith.

"TAX RETURN" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information file with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.

"THREATENED" -- a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
require a Person to make a disclosure under U.S. federal securities laws.

2. SALE AND TRANSFER OF SHARES; CLOSING

2.1 SHARES

Subject to the terms and conditions of this Agreement, at the Closing, Seller
will issue and sell the Shares to Investor, and Investor will purchase the
Shares from Seller.

2.2 PURCHASE PRICE

The purchase price (the "Purchase Price") for the Shares will be $10,000,000.

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2.3 CLOSING

The purchase and sale (the "Closing") provided for in this Agreement will take
place at the offices of Investor's counsel at Barnett Tower, Suite 1600, 701
Brickell Ave., Miami, Florida 33131, at 4:30 p.m. (local time) on October 30,
1997 or at such other time and place as the parties may agree, and will be
effective as of the close of business on October 31, 1997.

2.4 CLOSING OBLIGATIONS

At the Closing:

(a) Seller and HEICO will deliver to Investor:

(i) certificates representing the Shares;

(ii) the Shareholders Agreement, duly executed by Seller and
HEICO;

(iii) the Research and Development Cooperation Agreement, duly
executed by the Seller;

(iv) the Tax Allocation and Sharing Agreement, duly executed
by Seller and HEICO;

(v) an opinion letter from Seller's and HEICO's counsel in a
form reasonably acceptable to Investor; and

(vi) a certified copy of the amended Articles of Incorporation
of Seller reflecting Investor's preemptive rights;

(b) Investor will deliver to Seller:

(i) the Purchase Price by wire transfer to accounts specified
by Seller or by any other means mutually agreed to by Seller and
Investor;

(ii) the Shareholders Agreement duly executed by Investor;

(iii) the Research and Development Cooperation Agreement, duly
executed by Investor; and

(iv) an opinion letter from counsel of Investor (that may rely
on issues of German law on an opinion from Investor's in-house counsel)
in a form reasonably acceptable to Seller and HEICO.

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3. REPRESENTATIONS AND WARRANTIES OF SELLER AND HEICO

Seller and HEICO represent and warrant to Investor as follows, provided however,
none of the following representations and warranties are made with respect to
the business or assets of Northwings:

3.1 ORGANIZATIONS AND GOOD STANDING

(a) The Seller, HEICO and each Seller's Company is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under Seller's or Seller's Companies' Contracts. The Seller, HEICO and each
Seller's Company is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.

(b) Seller or HEICO has made available to Investor copies of the
Organizational Documents of each Seller's Company, as currently in effect.

3.2 AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid, and binding obligation
of Seller and HEICO, enforceable against Seller and HEICO in accordance with its
terms. Upon the execution and delivery by Seller and HEICO of the Shareholders
Agreement, the Research and Development Cooperation Agreement and the Tax
Allocation and Sharing Agreement (collectively, the "Seller's Closing
Documents"), the Seller's Closing Documents will constitute the legal, valid,
and binding obligations of Seller and HEICO, as may be applicable, enforceable
against Seller and HEICO, as may be applicable, in accordance with their
respective terms. Seller and HEICO have the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and the
Seller's Closing Documents and to perform its obligations under this Agreement
and the Seller's Closing Documents.

(b) Except as set forth in Part 3.2 of the Disclosure Letter, neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):

(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of the Seller's
Companies, or (B) any resolution adopted by the board of directors or
the stockholders of any Seller's Company;

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(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to challenge
any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which
Seller, any Seller's Company or HEICO or any of the assets owned or
used by any Seller's Company, may be subject;

(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by any Seller's Company or that
otherwise relates to the business of, or any of the assets owned or
used by, any Seller's Company;

(iv) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any applicable
contract; or

(v) result in the imposition or creation of any encumbrance
upon or with respect to any of the assets owned or used by any Seller's
Company.

Except as set forth in Part 3.2 of the Disclosure Letter, neither the Seller,
HEICO or any Seller's Company is or will be required to give any notice to or
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.

3.3 CAPITALIZATION

The authorized equity securities of the Seller consist of 10,000 shares of
common stock, par value $0.01 per share, of which 800 shares are issued and
outstanding. The Shares, upon consummation of the Contemplated Transactions
shall constitute twenty percent (20%) of the issued and outstanding equity
securities of the Seller. HEICO is and will be on the Closing Date the record
and beneficial owner and holder of all the other equity securities of the
Seller, free and clear of all encumbrances except for the lien of that certain
credit facility with SunTrust Bank, N.A. All of the outstanding equity
securities and other securities of each Seller's Company are owned of record and
beneficially by one or more of the Seller's Companies, free and clear of all
encumbrances except for the lien of that certain credit facility with SunTrust
Bank, N.A. No legend or other reference to any purported encumbrance appears
upon any certificate representing equity securities of any Seller's Company
other than legends required by applicable securities laws. All of the
outstanding equity securities of each Seller's Company have been duly authorized
and validly issued and are fully paid and nonassessable. There are no Contracts
relating to the issuance, sale, or transfer of any equity securities or other
securities of any Seller's Company. None of the outstanding equity securities or
other securities of any Seller's Company was issued in violation of the
Securities Act or any other Legal Requirement.

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No Seller's Company owns, or has any Contract to acquire, any equity securities
or other securities of any Person (other than Seller's Companies) or any direct
or indirect equity or ownership interest in any other business in excess of ten
percent (10%) of the total equity of any such business.

3.4 FINANCIAL STATEMENTS

Seller or HEICO has made available to Investor: (a) unaudited balance sheets of
the Seller's Companies as at October 31, 1996 and the related unaudited
statements of income, changes in stockholders' equity, and cash flow for the
fiscal year then ended, and (b) an unaudited balance sheet of the Seller's
Companies as at July 31, 1997 (the "Interim Balance Sheet") and the related
unaudited statements of income, changes in stockholders' equity, and cash flow
for the nine (9) months then ended. Such financial statements fairly present the
financial condition and the results of operations, changes in stockholders'
equity, and cash flow of the Seller's Companies as at the respective dates of
and for the periods referred to in such financial statements, all in accordance
with GAAP, subject to normal recurring year-end adjustments (the effect of which
will not, individually or in the aggregate, be materially adverse) and the
absence of notes and deferred taxes; the financial statements referred to in
this Section 3.4 reflect the consistent application of such accounting
principles throughout the periods involved. No financial statements of any
Person other than the Seller's Companies are required by GAAP to be included in
the consolidated financial statements of the Seller.

3.5 SEC DOCUMENTS.

HEICO has filed all required reports, schedules, forms, statements and other
documents required to be filed under the Exchange Act with the SEC since January
1, 1995 (the "HEICO SEC Documents"). As of their respective dates, the HEICO SEC
Documents complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such HEICO SEC Documents. Except to the extent that information
contained in any HEICO SEC Document has been revised or superseded by a
later-filed HEICO SEC Document, filed and publicly available prior to the date
of this Agreement, none of the HEICO SEC Documents contained when filed any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of HEICO included in the HEICO SEC
Documents complied as of their respective dates of filing with the SEC as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of HEICO as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit

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adjustments). The representations and warranties set forth in this Section
3.5 shall not apply to any noncompliance, nonfilings, misstatements, omissions
or failures to present fairly or conform to generally accepted accounting
principles, which would not, individually or in the aggregate, have a material
adverse effect on HEICO. Except as set forth in the HEICO SEC Documents, and
except for liabilities and obligations incurred in the Ordinary Course of
Business, to the Knowledge of Seller, any Seller's Company and HEICO, HEICO has
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles to
be set forth on a balance sheet of HEICO or in the notes thereto which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on HEICO. Notwithstanding anything to the contrary
contained in this Agreement, neither HEICO nor Seller shall have any
responsibility for the breach of this Section 3.5 unless such breach relates to
the financial statements, assets or liabilities of Seller's Companies.

3.6 NO UNDISCLOSED LIABILITIES OR MATERIAL ADVERSE CHANGE

Except for the Northwings Accessories Corp., a Florida corporation
("Northwings") acquisition by Seller, since the date of the Interim Balance
Sheet, to the Knowledge of Seller, any Seller's Company and HEICO, there has not
been any material adverse change in the business, operations, properties, assets
or condition of any Seller's Companies taken as a whole, and to the Knowledge of
Seller, any Seller's Company and HEICO, no event has occurred or circumstance
exists that may result in such a material adverse change.

Except as set forth in Part 3.6 of the Disclosure Letter, to the Knowledge of
Seller, any Seller's Company and HEICO, the Seller's Companies have no
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Interim Balance Sheet and
liabilities and obligations incurred in the Ordinary Course of Business since
the respective dates thereof. The liabilities or obligations referred to in this
paragraph include, but are not limited to, any liability for or with respect to
any Taxes which were incurred or suffered by any Seller's Company during any Tax
period (or portion thereof) up to and including the Closing Date including
without limitation Taxes that are owed as a result of any dividends which are
declared before the Closing Date but paid after the Closing Date.

3.7 LEGAL PROCEEDINGS; ORDERS

(a) Except as set forth in Part 3.7 of the Disclosure Letter, there is
no pending Proceeding:

(i) that has been commenced by or against any Seller's
Company or that otherwise relates to or may affect the business of, or
any of the assets owned or used by, any Seller's Company; or

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(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions.

To the Knowledge of Seller, any Seller's Company and HEICO, (1) no such
Proceeding has been Threatened, and (2) no event has occurred or circumstance
exists that is likely to give rise to or serve as a basis for the commencement
of any such Proceeding. Seller or on Seller's behalf, has made available to
Investor copies of all pleadings, correspondence, and other documents relating
to each Proceeding listed in Part 3.7 of the Disclosure Letter. The Proceedings
listed in Part 3.7 of the Disclosure Letter will not have a material adverse
effect on the business, operations, assets or financial condition of any
Seller's Company.

(b) Except as set forth in Part 3.7 of the Disclosure Letter:

(i) there is no Order to which any of the Seller's
Companies, or any of the assets owned or used by any Seller's Company,
is subject that prohibits or prevents Seller's Companies from
conducting its business in the Ordinary Course of Business;

(ii) neither Seller or HEICO is subject to any Order
that relates to the business of, or any of the assets owned or used by,
any Seller's Company that prohibits or prevents Seller's Companies from
conducting its business in the Ordinary Course of Business; and

(iii) to the Knowledge of Seller, any Seller's Company
and HEICO, no officer, director, agent, or employee of any Seller's
Company is subject to any Order that prohibits such officer, director,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of any Seller's Company
in the Ordinary Course of Business.

(c) Except as set forth in Part 3.7 of the Disclosure Letter:

(i) each Seller's Company is, and has been, in full
compliance with all of the terms and requirements of each Order to
which it, or any of the assets owned or used by it, is or has been
subject;

(ii) to the Knowledge of Seller, any Seller's Company
and HEICO, no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any
Order to which any Seller's Company, or any of the assets owned or used
by any Seller's Company, is subject; and

(iii) no Seller's Company has received any notice or
other communication (whether oral or written) from any Governmental
Body or any

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other Person regarding any actual, alleged, possible, or
potential violation of, or failure to comply with, any term or
requirement of any Order to which any Seller's Company, or any of the
assets owned or used by any Seller's Company, is or has been subject.

3.8 ABSENCE OF CERTAIN CHANGES AND EVENTS

Except as set forth in Part 3.8 of the Disclosure Letter, since the date of the
Interim Balance Sheet, the Seller's Companies have conducted their businesses
only in the Ordinary Course of Business and there has not been any:

(a) change in any Seller's Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock of
any Seller's Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by any Seller's Company of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock other than that certain dividend
in the amount of ten million U.S. Dollars (US$ 10,000,000) previously declared;

(b) amendment to the Organizational Documents of any Seller's Company;

(c) except for the Northwings acquisition, purchase, sale (other than
sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any assets or property of any Seller's Company or mortgage,
pledge, or imposition of any lien or other encumbrance on any material assets or
property of any Seller's Company, including the sale, lease, or other
disposition of any of the Intellectual Property Assets; and

(d) payment or increase by any Seller's Company of any bonuses,
salaries, or other compensation to any stockholder, director, officer, or
(except in the Ordinary Course of Business) employee.

3.9 INSURANCE

Part 3.9 of the Disclosure Letter contains a complete and accurate list of all
policies of liability insurance to which Seller or any Seller's Company is a
party or that provide coverage to Seller, any Seller's Company, or any director
or officer of a Seller's Company.

3.10 ENVIRONMENTAL MATTERS

Except as set forth in Part 3.10 of the Disclosure Letter:

(a) No notice, demand, summons, or similar request for information, or
complaint or Order has been issued or served on Seller or any Seller's Company
and, to the Knowledge of Seller, any Seller's Company and HEICO, no penalty has
been assessed,

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no investigation or review is pending, or is Threatened, against any of them,
and to the Knowledge of Seller, any Seller's Company and HEICO, no
Environmental, Health, and Safety Liabilities exist with respect to (i) any
alleged violation of any Environmental Law, (ii) any alleged failure to have any
Environmental Permit, (iii) any Hazardous Activity, or (iv) any Release of
Hazardous Materials.

(b) To the Knowledge of Seller, any Seller's Company and HEICO, no
underground storage tank for Hazardous Materials is present at any real property
owned, leased or otherwise operated by Seller or any Seller's Company, currently
or (i) during the three (3) year period prior to the date of this Agreement for
leased or operated real property, or (b) during the five (5) year period prior
to the date of this Agreement for owned real property.

(c) To the Knowledge of Seller, any Seller's Company and HEICO, there
are no Pre-Closing Environmental Liabilities that have had or are likely to have
a material adverse effect on the business, financial condition, results of
operations or prospects of Seller, or any Seller's Company.

(d) To the Knowledge of Seller, any Seller's Company and HEICO, no
Hazardous Material has been Released by Seller or any Seller's Company at or
under any (i) owned real property, leased real property or other real property
during the period which Seller or any Seller's Company owned, leased or
otherwise operated such property. To the Knowledge of Seller, any Seller's
Company and HEICO, all Hazardous Materials used in the business of Seller or any
Seller's Company have been reported in accordance with all applicable legal
requirements.

(e) To the Knowledge of Seller, any Seller's Company and HEICO, no
owned, leased or operated real property has directly or indirectly transported
or arranged for the transportation of any Hazardous Materials in violation of
any Environmental Law listed or proposed for listing on the National Priorities
List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any
similar federal, state, local or foreign site lists requiring investigation or
clean-up.

(f) To the Knowledge of Seller, any Seller's Company and HEICO, there
are no liens under any Environmental Laws on any owned real property, leased
real property or other real property and no governmental actions have or are in
the process of being taken that could subject such real property to such liens.

(g) There has been no environmental investigation, study, audit test,
review or other analysis conducted within the last two (2) years on any owned
real property, leased real property or other real property of Seller or any
Seller's Company that has not been delivered or made available to Investor.

3.11 LABOR RELATIONS; COMPLIANCE

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No Seller's Company has been or is a party to any collective bargaining or other
labor Contract and there has not been, there is not presently pending or
existing, and to the Knowledge of Seller, any Seller's Company and HEICO, there
is not Threatened, any strike, slowdown, picketing, work stoppage.

3.12 COMPLIANCE WITH LAWS AND PERMITS

To the Knowledge of Seller, any Seller's Company and HEICO, the business of the
Seller's Companies is being conducted in compliance with all applicable Legal
Requirements, including without limitation, applicable Environmental Laws and
the rules and regulations promulgated by the FAA. No notice of any default,
violation or non-compliance of any Legal Requirement relating to any Seller's
Company has been received by Seller, any Seller's Company and HEICO within the
last two (2) years and, to the Knowledge of Seller, any Seller's Company and
HEICO, no notice of any default, violation or non-compliance of any Legal
Requirement relating to any Seller's Company has been received by Seller, any
Seller's Company and HEICO prior to the two (2) year period mentioned above. To
the Knowledge of Seller, any Seller's Company and HEICO, all reengineering
processes used by Seller, any Seller's Company or any of their Affiliates for
designing, manufacturing and testing any and all parts comply with all
applicable Legal Requirements, including without limitation, applicable patent,
copyright and other laws relating to intellectual property and the rules and
regulations promulgated by the FAA. To the Knowledge of Seller, any Seller's
Company and HEICO, any and all parts, spare or replacement parts, or other items
produced by any Seller's Company or any of their Affiliates are designed,
manufactured and tested consistent with such reengineering processes.

To the Knowledge of Seller, any Seller's Company and HEICO, Seller and the
Seller's Companies possess all material permits including, without limitation,
licenses and other authorizations required to conduct their business, including
all appropriate FAA certificates, and all such permits are valid, current and in
full force and effect.

(i) To the Knowledge of Seller, any Seller's Company and
HEICO, the Intellectual Property Assets are all those necessary for the
operation of the Seller's Companies' businesses as they are currently
conducted. To the Knowledge of Seller, any Seller's Company and HEICO,
one or more of the Seller's Companies is the owner of all right, title,
and interest in and to each of the Intellectual Property Assets, free
and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use without
payment to a third party all of the Intellectual Property Assets.

(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no employee of any Seller's Company has entered into any
Contract that restricts or limits in any way the scope or type of work
in which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to anyone
other than one or more of the Seller's Companies.

(c) PATENTS

(i) To the Knowledge of Seller, any Seller's Company and
HEICO, all of the issued Patents are currently in compliance with
formal legal requirements (including payment of filing, examination,
and maintenance fees and profits of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the Closing Date.

(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To the Knowledge of
Seller, any Seller's Company and HEICO, there is no potentially
interfering patent or patent application of any third party.

(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Patent is infringed or, has been challenged or threatened in
any way except as claimed in the litigation set forth in Part 3.7 of
the Disclosure Letter. To the Knowledge of Seller, any Seller's Company
and HEICO, none of the products manufactured and sold, nor any process
or know-how used, by any Seller's Company infringes or is alleged to
infringe any patent or other proprietary right of any other Person.

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(iv) To the Knowledge of Seller, any Seller's Company and
HEICO, all products made, used, or sold under the Patents have been
marked with the proper patent notice.

(d) Trademarks

(i) To the Knowledge of Seller, any Seller's Company and HEICO
all Marks that have been registered with the United states Patent and
Trademark Office are currently in compliance with all formal legal
requirements (including the timely post-registration filing of
affidavits of use and incontestability and renewal applications), are
valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within ninety days after the Closing Date.

(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Mark is now involved in any opposition, invalidation, or
cancellation and, no such action its Threatened with respect to any of
the Marks.

(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, there is no potentially interfering trademark or trademark
application of any third party.

(iv) To the Knowledge of Seller, any Seller's Company and
HEICO, no Mark is infringed or threatened in any way. To the Knowledge
of Seller, any Seller's Company and HEICO, none of the Marks used by
any Seller's Company infringes or is now alleged to infringe any trade
name, trademark, or service mark of any third party.

(e) Copyrights

(i) To the Knowledge of Seller, any Seller's Company and
HEICO, all the Copyrights have been registered and are currently in
compliance with formal legal requirements, are valid and enforceable,
and are not subject to any maintenance fees or taxes or actions falling
due within ninety (90) days after the date of Closing.

(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Copyright is infringed or, has been challenged or threatened
in any way. To the Knowledge of Seller, any Seller's Company and HEICO,
none of the subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is a derivative
work based on the work of a third party.

(f) TRADE SECRETS

(i) To the Knowledge of Seller, any Seller's Company and
HEICO, with respect to each Trade Secret, the documentation relating to
such Trade

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Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper
use.

(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, Seller, HEICO and the Seller's Companies have taken all
reasonable precautions to protect the secrecy, confidentiality, and
value of their Trade Secrets.

(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, one or more of the Seller's Companies has good title and an
absolute (but not necessarily exclusive) right to use the Trade
Secrets. The Trade Secrets are not part of the public knowledge or
literature, and, to the Knowledge of Seller, any Seller's Company and
HEICO, have not been used, divulged, or appropriated either for the
benefit of any Person (other than one or more of the Seller's
Companies) or to the detriment of the Seller's Companies. To the
Knowledge of Seller, any Seller's Company and HEICO, and any of their
Affiliates, no Trade Secret is subject to any adverse claim or has been
challenged or threatened in any way except as claimed in the litigation
set forth in Part 3.7 of the Disclosure Letter.

3.14 DISCLOSURE

No representation or warranty of Seller or HEICO in this Agreement and no
statement in the Disclosure Letter omits to state a material fact necessary to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.

3.15 EMPLOYEE BENEFIT MATTERS

(a) No unwritten amendment exists with respect to any Employee Benefit
Plan of the Seller or any Seller's Company. For purposes of this Agreement an
"Employee Benefit Plan" means each employee benefit plan, as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").

(b) To the Knowledge of Seller, any Seller's Company and HEICO, each
Employee Benefit Plan of the Seller or any Seller's Company has been
administered and maintained in compliance with all laws, rules and regulations,
except for such noncompliance that would not have a material adverse effect on
the Seller or any Seller's Company. To the Knowledge of Seller, any Seller's
Company and HEICO, no Employee Benefit Plans of the Seller or any Seller's
Company is currently the subject of an audit, investigation, enforcement action
or other similar proceeding conducted by any state or federal agency. No
prohibited transactions (within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
(the "Code")) have occurred with respect to any Employee Benefit Plan of the
Seller or any Seller's Company. No pending or, to the Knowledge of Seller, any
Seller's Company and HEICO, Threatened, claims, suits or other proceedings exist
with respect to any

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Employee Benefit Plan of the Seller or any Seller's Company other than normal
benefit claims filed by participants or beneficiaries.

(c) Except as disclosed in Part 3.15 of the Disclosure Letter, to the
Knowledge of Seller, any Seller's Company and HEICO, no accumulated funding
deficiency (within the meaning of Section 412 of the Code), whether waived or
unwaived, exists with respect to any Employee Benefit Plan of Seller or any
Seller's Company or any plan sponsored by any member of a "controlled group" (as
defined in Section 414(b) of the Code ("Controlled Group"). With respect to each
Employee Benefit Plan of Seller or any Seller's Company subject to Title IV of
ERISA, to the Knowledge of Seller, any Seller's Company and HEICO, the assets of
each such plan are at least equal in value to the present value of accrued
benefits determined on an ongoing basis as of the date hereof. With respect to
each Employee Benefit Plan of Seller or any Seller's Company described in
Section 501(c)(9) of the Code, to the Knowledge of Seller, any Seller's Company
and HEICO, the assets of each such plan are at least equal in value to the
present value of accrued benefits as of the date hereof. To the Knowledge of
Seller, any Seller's Company and HEICO, neither the Seller or any Seller's
Company or any member of a Controlled Group has any liability to pay excise
taxes with respect to any Employee Benefit Plan of Seller or any Seller's
Company under applicable provisions of the Code or ERISA. To the Knowledge of
Seller, any Seller's Company and HEICO, neither the Seller or any Seller's
Company nor any member of a Controlled Group is or ever has been obligated to
contribute to a multiemployer plan within the meaning of Section 3(37) of ERISA.

(d) To the Knowledge of Seller, any Seller's Company and HEICO, no
reportable event (within the meaning of Section 4043 of ERISA) for which the
notice requirement has not been waived has occurred with respect to any Employee
Benefit Plan of Seller or any Seller's Company subject to the requirements of
Title IV of ERISA.

(e) To the Knowledge of Seller, any Seller's Company and HEICO, neither
the Seller or any Seller's Company has any obligation or commitment to provide
medical, dental or life insurance benefits to or on behalf of any of its
employees who may retire or any of its former employees who have retired from
employment with the Seller or any Seller's Company.

3.16 RELATIONSHIPS WITH RELATED PERSONS

Neither Seller, HEICO or any Related Person of Seller, HEICO or of any Seller's
Company has any material interest in any property (whether real, personal, or
mixed and whether tangible or intangible), used in or pertaining to the Seller's
Companies' businesses except with respect to the ownership of the building which
Northwings leases as its premises. Neither Seller, HEICO or any Related Person
of Seller, HEICO or of any Seller's Company owns (of record or as a beneficial
owner) an equity interest or any other financial or profit interest in, a Person
that has (i) had business dealings or a material financial interest in any
transaction with any Seller's Company other than business dealings or
transactions conducted in the Ordinary Course of Business with the Seller's
Companies

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at substantially prevailing market prices and on substantially prevailing market
terms, or (ii) engaged in competition with any Seller's Company with respect to
any line of the products or services of such Seller's Company (a "Competing
Business") in any market presently served by such Seller's Company.

3.17 BROKERS OR FINDERS

Seller, HEICO and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.

4. REPRESENTATIONS AND WARRANTIES OF INVESTOR

4.1 ORGANIZATION AND GOOD STANDING

Investor is a corporation duly organized, validly existing, and in good standing
under the laws of the Federal Republic of Germany.

4.2 AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid, and binding obligation
of Investor, enforceable against Investor in accordance with its terms. Upon the
execution and delivery by Investor of the Shareholders Agreement and the
Research and Development Cooperation Agreement (collectively, the "Investor's
Closing Documents"), the Investor's Closing Documents will constitute the legal,
valid, and binding obligations of Investor, enforceable against Investor in
accordance with their respective terms. Investor has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and the Investor's Closing Documents and to perform its obligations under this
Agreement and the Investor's Closing Documents.

(b) Except as set forth in Schedule 4.2, neither the execution and
delivery of this Agreement by Investor nor the consummation or performance of
any of the Contemplated Transactions by Investor will give any Person the right
to present, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:

(i) any provision of Investor's Organizational Documents;

(ii) any resolution adopted by the board of directors or the
stockholders of Investor;

(iii) any Legal Requirements or Order to which Investor may be
subject; or

(iv) any Contract to which Investor is a party or by which
Investor may be bound.

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Except as set forth in Schedule 4.2, Investor is not and will not be required to
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.

4.3 CERTAIN PROCEEDINGS

There is no pending Proceeding that has been commenced against Investor and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To Investor's
Knowledge, no such Proceeding has been Threatened.

4.4 BROKERS OR FINDERS

Investor and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement and will indemnify
and hold Seller and HEICO harmless from any such payment alleged to be due by or
through Investor as a result of the action of Investor or its officers or
agents.

4.5 INVESTMENT REPRESENTATION

(a) The Investor understands and acknowledges that (i) the Shares have
not been registered under the Securities Act or any applicable Blue Sky Laws in
reliance upon exemptions provided thereunder and that the Shares may not be
transferred or sold except pursuant to the registration provisions of the
Securities Act or pursuant to an applicable exemption therefrom and pursuant to
applicable Blue Sky Laws and regulations and (ii) the representations and
warranties contained herein are being relied upon by the Seller as a basis for
the exemption of the offer and sale of the Shares to the Investor under the
registration requirements of the Securities Act and any applicable Blue Sky
Laws. The Investor acknowledges that the stock certificate for the Shares shall
bear a restrictive legend as required by applicable U.S. federal securities
laws. The Investor is acquiring the Shares for the Investor's own account, and
not as a nominee for any other party for the purpose of investment and not with
a view to, or for sale in connection with, any "distribution," as such term is
defined in Rule 501 of Regulation D under the Securities Act. The Investor has
had the opportunity to review the books and records of the Seller and has been
furnished or provided access to such relevant information that the Investor has
requested. The Investor is knowledgeable, sophisticated and experienced in
business and financial matters of the type contemplated hereby and is able to
bear the economic risks inherent in its investment in the Seller.

(b) The Investor is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act. The Investor has not been
organized for the purpose of acquiring the Shares.

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(c) The Investor has considered the risks associated with an investment
in the Shares and has had the opportunity to ask questions of and receive
answers from the officers of the Seller about an investment in the Shares and
the business and financial condition of the Seller sufficient to enable it to
evaluate the risks and merits of its investment in the Seller.

5. INDEMNIFICATION; REMEDIES

5.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE

All representations, warranties, covenants, and obligations in this Agreement,
the Disclosure Letter, and any other certificate or document delivered pursuant
to this Agreement will survive the Closing for a period of eighteen (18) months,
except for the representations and warranties contained in Sections 3.2, 3.3 and
4.2, and in Exhibit 3, which shall survive indefinitely, and the representations
and warranties contained in Section 3.10, which shall survive for the applicable
statute of limitations periods. The right to indemnification, payment of Damages
or other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any Knowledge acquired (or capable of being acquired) at any time by
Investor, whether before or after the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.

5.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY HEICO

HEICO will indemnify and hold harmless Investor and their respective
representatives, stockholders, controlling persons, and affiliates
(collectively, the "Investor Indemnified Persons") for, and will pay to the
Indemnified Persons based on their ownership of Seller the amount of, any loss,
liability, claim, damage (including incidental and consequential damages),
expense (including (i) costs of investigation and defense and reasonable
attorneys' fees, and (ii) costs of cleanup, containment, or other remediation
with respect to the representation and warranty made in Section 3.10 but (iii)
net of recoveries and all reserves on the books of the Seller's Companies on the
date of this Agreement) or diminution of value, whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:

(a) any Breach of any representation or warranty made by Seller or
HEICO in this Agreement, the Disclosure Letter, or any other certificate or
document delivered by Seller or HEICO pursuant to this Agreement; and.

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(b) any Breach by Seller or HEICO of any covenant or obligation of same
in this Agreement.

By way of illustration, (i) if Seller incurs $2,000,000 in Damages under this
Section 5.2, HEICO shall pay $300,000 to Investor if Investor owns twenty
percent (20%) of the issued and outstanding shares of common stock of Seller and
(ii) if Seller incurs $2,000,000 in Damages under this Section 5.2, HEICO shall
pay $150,000 to Investor if Investor owns ten percent (10%) of the issued and
outstanding shares of common stock of Seller.

The remedies provided in this Section 5.2 will be the exclusive remedies that
will be available to Investor or the other Investor Indemnified Persons pursuant
to this Agreement.

Notwithstanding the foregoing, the parties have agreed to the terms and
conditions set forth in Exhibit 3 hereof with respect to Prior Litigation (as
defined hereinafter in Exhibit 3).

5.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY INVESTOR

Investor will indemnify and hold harmless Seller and HEICO, and will pay to
Seller, HEICO and their respective representatives, stockholders, controlling
persons and Affiliates ("Seller Indemnified Persons") the amount of any Damages
arising, directly or indirectly, from or in connection with (a) any Breach of
any representation or warranty made by Investor in this Agreement or in any
certificate delivered by Investor pursuant to this Agreement, and (b) any Breach
by Investor of any covenant or obligation of Investor in this Agreement.

The remedies provided in this Section 5.3 will be the exclusive remedies that
will be available to Seller and HEICO or the Seller Indemnified Persons pursuant
to this Agreement.

5.4 LIMITATIONS ON AMOUNT - HEICO

HEICO will have no liability (for indemnification or otherwise) with respect to
the matters described until the total of all Damages with respect to such
matters exceeds $500,000, and then only for the amount by which such Damages
exceed $500,000 except with respect to Damages directly or indirectly incurred
by Investor arising from the Prior Litigation for which such indemnification
shall be exclusively governed by, except for the limitation provided in the next
paragraph of this Section 5.4, the terms and conditions set forth in Exhibit 3.
However, this Section 5.4 will not apply to any intentional Breach by Seller or
HEICO of any covenant or obligation, and HEICO will be liable for all Damages
with respect to such Breaches.

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The indemnification obligations of HEICO under this Agreement, including those
in Exhibit 3, may not exceed the Purchase Price.

5.5 LIMITATIONS ON AMOUNT - INVESTOR

Investor will have no liability (for indemnification or otherwise) with respect
to the matters described in Section 5.3 until the total of all Damages with
respect to such matters exceeds $500,000, and then only for the amount by which
such Damages exceed $500,000. However, this Section 5.5 will not apply to any
intentional Breach by Investor of any covenant or obligation, and Investor will
be liable for all Damages with respect to such Breaches.

The indemnification obligations of Investor under this Agreement may not exceed
$2,000,000.

5.6 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS

(a) Promptly after receipt by an indemnified party under Section 5.2 or
5.3 of notice of the commencement of any Proceeding against it, such indemnified
party (Investor Indemnified Persons or Seller Indemnified Persons, as the case
may be) will, if a claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnified party's failure to give such
notice.

(b) If any Proceeding referred to in Section 5.6(a) is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the indemnifying party will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 5 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding. If the indemnifying party assumes the defense of a
Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification; (ii)

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no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
(10) days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).

(d) The parties to this Agreement hereby consent to the exclusive
jurisdiction of the courts identified in Section 6.4 hereof.

5.7 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS

A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.

5.8 ATTORNEYS' FEES

If any action is taken to enforce or interpret the provisions of this Agreement,
the prevailing party shall be entitled to its reasonable costs and expenses,
including attorneys' fees from the non-prevailing party, in addition to any
other relief to which that party may be entitled.

6. GENERAL PROVISIONS

6.1 EXPENSES

Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. Seller and HEICO will

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cause the Seller's Companies not to incur any out-of-pocket expenses in
connection with this Agreement.

6.2 PUBLIC ANNOUNCEMENTS

Any public announcement or similar publicity with respect to this Agreement or
the Contemplated Transactions will be issued, if at all, at such time and in
such manner as Investor and Seller shall mutually agree, subject to the parties'
obligations under applicable U.S. laws, as attached hereto as Exhibit 2. Seller,
HEICO and Investor will consult with each other concerning the means by which
the Seller's Companies' employees, customers, and suppliers and others having
dealings with the Seller's Companies will be informed of the Contemplated
Transactions, and Investor will have the right to be present for any such
communication.

6.3 NOTICES

All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addressees and telecopier numbers as a party may designate by
notice to the other parties):

Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement shall be brought against any of the parties
exclusively in the courts of the State of Florida, County of Dade, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Southern District of Florida, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world pursuant to the rules of the court
under which the action is filed in Dade County, Florida.

6.5 FURTHER ASSURANCES

The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and delivery to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

6.6 WAIVER

The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power,

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or privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.

6.7 ENTIRE AGREEMENT AND MODIFICATION

This Agreement supersedes all prior agreements between the parties with respect
to its subject matter and constitutes (along with the documents referred to in
this Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.

6.8 DISCLOSURE LETTER

(a) The disclosures in the Disclosure Letter relate to the
representations and warranties in any of the Sections of the Agreement.

(b) In the event of any inconsistency between the statements in the
body of this Agreement and those in the Disclosure Letter (other than an
exception expressly set forth as such in the Disclosure Letter with respect to
the representations or warranties), the statements in the body of this Agreement
will control.

6.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

Neither party may assign any of its rights under this Agreement without the
prior consent of the other party except that either party may assign any of its
rights under this Agreement to any wholly owned subsidiary thereof. Subject to
the preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.

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6.10 SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

6.11 SECTION HEADINGS, CONSTRUCTION

The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.

6.12 GOVERNING LAW

This Agreement will be governed by the laws of the State of Florida without
regard to conflicts of laws principles.

6.13 COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.

THIS SHAREHOLDERS AGREEMENT (this "Agreement") dated as of October 30,
1997 by and among HEICO Aerospace Holdings Corp., a Florida corporation
("Newco"), HEICO Aerospace Corporation, a Florida corporation ("Company") which
is a wholly owned subsidiary of Newco, HEICO Corporation, a Florida corporation
("Parent"), Lufthansa Technik AG, a corporation organized under the laws of the
Federal Republic of Germany ("LHT") and the parties which may execute and join
in this Agreement in the future. Parent, LHT, and any party which may execute
and join in this Agreement in the future are collectively referred to as the
"Shareholders" and individually as a "Shareholder."

INTRODUCTION

Simultaneously with the execution and delivery of this Agreement, LHT is
purchasing 200 shares (the "Acquired Shares") of Newco's common stock, par value
$.0l per share (the "Common Stock") representing twenty percent (20%) of the
voting securities of Newco, pursuant to a Stock Purchase Agreement of even date
herewith, by and among Parent, LHT, and Newco (the "Purchase Agreement");

Newco, Company and the Shareholders desire to enter into this Agreement
for the purposes contained in this Agreement, including (i) establishing the
composition of Newco's Board of Directors (the "Newco Board") and committees
thereof, (ii) agreeing upon certain matters with respect to future investments
in the Aerospace and Aviation Industry, (iii) agreeing upon certain matters with
respect to the operation of Newco under certain circumstances, and (iv) agreeing
upon certain preemptive and special rights and rights of first refusal with
respect to the Common Stock of Newco.

The execution and delivery of this Agreement by Newco and the existing
shareholders of Newco is a condition to LHT's purchase, and the sale by Newco,
of the Acquired Shares pursuant to the Purchase Agreement.

In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following terms have the following
meanings:

"AEROSPACE AND AVIATION INDUSTRY" means all businesses and
industries producing,

manufacturing, procuring, supplying, servicing or using aircraft or spacecraft
or equipment used to service such aircraft or spacecraft, or parts thereof,
other than ground support equipment used in the Aerospace and Aviation Industry.

"AFFILIATE" An "Affiliate" of, or a person "Affiliated" with, a
specified person, is a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the person specified, but in no case shall a Person owning less than twenty five
percent (25%) of the equity of LHT or Parent be deemed to be an "Affiliate" of,
or a person "Affiliated" with either LHT or Parent, respectively.

"ACQUIRED SHARES" has the meaning set forth in the recitals.

"CLOSING" means the closing date of the Purchase Agreement.

"COMMON STOCK" has the meaning set forth in the recitals.

"COMPANY" has the meaning set forth in the preamble.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute, rules and regulations.

"INVESTMENT" means any expenditure or contribution of assets to
acquire or form a business or to acquire a substantial portion of the assets of
a business in order to produce revenue, including but not limited to the
acquisition of an equity interest in any newly formed joint venture or
subsidiary.

"LHT" has the meaning set forth in the preamble.

"NEWCO" has the meaning set forth in the preamble.

"NEWCO BOARD" has the meaning set forth in the recitals.

"PARENT" has the meaning set forth in the preamble.

"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity or any
department, agency or political subdivision thereof.

"PURCHASE AGREEMENT" has the meaning set forth in the recitals.

"RESEARCH AND DEVELOPMENT COOPERATION AGREEMENT" means that certain
research and development cooperation agreement entered into by Newco and LHT of
even date hereto.

"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.

2

"SHARES" means (i) any Common Stock purchased or otherwise acquired
by any Shareholder, (ii) any Common Stock issued or issuable with respect to the
securities referred to in (i) above by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization, and (iii) any other security issued by
Newco having voting rights which is controlled by any Shareholder.

"SHAREHOLDER" and "SHAREHOLDERS" have the meanings set forth in the
preamble.

"TAX" (and, with correlative meaning, "Taxes" and "Taxable") means
any net income, alternative, federal environmental taxes, or any other tax for
which a Hypothetical Separate Tax Liability (as such term is defined in the Tax
Allocation and Sharing Agreement) is computed together with any interest or any
penalty, addition to tax or additional amount imposed by any governmental
authority (hereinafter a "Taxing Authority") responsible for the imposition of
any such tax (domestic or foreign).

"TAXING AUTHORITY" shall have the meaning ascribed to such term
within the definition of the term "Tax," above.

"TAX RETURNS" shall mean all income (estimated income) excise,
sales, unemployment, employer and employee withholding, social security,
occupation, franchise, customs and other Tax returns or Tax reports with respect
to Taxes required by Federal, State, foreign or local law or regulation.

"TAX SHARING AND ALLOCATION AGREEMENT" means the Tax Allocation and
Sharing Agreement effected as of even date herewith between Parent and Newco.

"TRANSFER" means any sale, assignment, conveyance, donation,
bequeath, pledge, hypothecation, transfer or other disposition (whether
voluntary, involuntary or by operation of law or by merger), or any agreement to
transfer.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

2.1 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS.

Each Shareholder represents and warrants to each other that (i) such
Shareholder is the record owner of the number of Shares set forth opposite its
name on SCHEDULE 2.1 attached hereto, (ii) this Agreement has been duly
authorized, executed and delivered by such Shareholder and constitutes the valid
and binding obligation of such Shareholder, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, and (iii) such Shareholder
has not granted and is not a party to any proxy,

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voting trust or other agreement with respect to the shares of Newco or its
subsidiaries which is inconsistent with, conflicts with or violates any
provision of this Agreement, or which is violated by this Agreement, and
expressly agrees not to grant any proxy or become party to any voting trust or
other agreement with respect to the shares of Newco or its subsidiaries which is
inconsistent with, conflicts with or violates any provision of this Agreement.

2.2 REPRESENTATIONS AND WARRANTIES OF NEWCO AND THE COMPANY.

Newco and the Company each represent and warrant to each Shareholder that
(i) each is a corporation duly organized, validly existing and in good standing
under the laws of Florida and is qualified to do business in every jurisdiction
in which its ownership of property or conduct of business requires it to
qualify, and (ii) this Agreement has been duly authorized, executed and
delivered by it and constitutes the valid and binding obligation of it
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.

ARTICLE 3

BOARDS OF DIRECTORS AND COMMITTEES

3.1 NEWCO BOARD.

From and after the Closing, and as long as LHT shall own at least ten
percent (10%) of the issued and outstanding Shares of Newco, each Shareholder
shall vote all of its Shares and the Shares over which such Shareholder has
voting control and shall take all other necessary or desirable actions within
its control (whether in its capacity as a shareholder, director, member of a
board committee or officer of Newco or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
Newco shall take all necessary corporate action within its control (including,
without limitation, calling special board of directors and shareholder
meetings), so that:

(i) no less than (a) two directors, if the Newco Board consists of up to
eight directors, (b) three directors, if the Newco Board consists of
nine or ten directors, or (c) twenty percent (20%) of the directors,
rounded up to the next whole number, if the Newco Board consists of
more than ten directors, shall be representatives designated by LHT,
provided however, such designated representatives must be reasonably
acceptable to the other directors of the Newco Board (it being
agreed that any LHT officer who also serves as a member of upper
management of LHT shall be acceptable to such directors) (such
designated representatives shall be referred to herein individually
as a "LHT Director" and, collectively, as the "LHT Directors"), and
each LHT Director shall serve until his or her successor is elected
and qualified;

4

(ii) the initial Newco Board shall consist of eight directors, two of
which shall be LHT Directors;

(iii) the removal, without cause, of any LHT Director from the Newco Board
shall be effected only upon the written request of LHT and under no
other circumstances;

(iv) in the event that any LHT Director ceases to serve as a member of
the Newco Board during his or her term of office, the resulting
vacancy on the Newco Board shall be filled within thirty (30) days
of such vacancy by another representative designated by LHT, as
provided hereunder;

(v) the removal, without cause, of any director designated by Parent, or
Parent's designee, from the Newco Board shall be effected only upon
the written request of Parent, or Parent's designee, and under no
other circumstances; and

(vi) in the event that any director designated by Parent, or Parent's
designee, ceases to serve as a member of the Newco Board during his
or her term of office, the resulting vacancy on the Newco Board
shall be filled within thirty (30) days of such vacancy by a
director designated by Parent or Parent's designee. The right to
increase or decrease the size of the Board of Directors shall remain
with Parent.

3.2 VISITATION RIGHTS OF LHT.

3.2.1. DESIGNATED REPRESENTATIVE AND ALTERNATE.

From and after the Closing and as long as LHT shall own at least ten
percent (10%) of the issued and outstanding Shares of Newco, LHT shall have the
right to designate one person (the "Designated Representative") to attend each
and every meeting of the boards of directors of Parent and the Company (the
"HEICO Boards"), and each and every meeting of any committee of such HEICO
Boards (the "HEICO Committees") either in person or by telephone (the
"Visitation Rights"). LHT acknowledges that the HEICO Boards and the HEICO
Committees may discuss matters regarding LHT and Newco, in which case such HEICO
Boards and HEICO Committees may request the Designated Representative or the
Alternate to not participate in such portion of the meetings, provided however,
that the HEICO Boards and the HEICO Committees conduct themselves in accordance
with applicable corporate law. In the event the Designated Representative is
unable to participate in any of the meetings of the HEICO Boards or the HEICO
Committees, an alternate (the "Alternate") shall be entitled to the Visitation
Rights, provided however, that the Alternate shall serve as a member of upper
management of LHT.

3.2.2. NOTICE TO DESIGNATED REPRESENTATIVE OR ALTERNATE.

Parent and Company shall provide LHT's Designated Representative or
Alternate with at least the same notice of meetings given to members of the
HEICO Boards and the HEICO

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Committees.

3.2.3. CONFIDENTIAL INFORMATION.

LHT's Designated Representative or Alternate shall have the right to
access information presented in advance of, at, or following such meetings, and
to participate in the meetings, each to the same extent as other members of
HEICO Boards or HEICO Committees; provided however, LHT's Designated
Representative's or Alternate's access and participation shall be subject to
applicable United States law as to military and security issues and the right to
withhold information if a potential conflict of interest exists with LHT or
Newco provided the HEICO Boards and HEICO Committees conduct themselves in
accordance with applicable corporate law. LHT's Designated Representative or
Alternate shall have no voting rights at such meetings.

LHT agrees to use the same means it uses to protect its own
confidential or proprietary information, but in any event not less than
reasonable means, to prevent the disclosure and to protect the confidentiality
of (i) written information received by LHT's Designated Representative or
Alternate from Parent or Company, and (ii) oral or visual information identified
as confidential at the time of disclosure. The term "Confidential Information"
shall mean (i) and (ii) in the preceding sentence. Confidential Information will
not include information which belongs to LHT or is (i) already known by LHT
without an obligation of confidentiality other than under this Agreement, (ii)
publicly known or becomes publicly known through no unauthorized act of LHT,
(iii) rightfully received from a third party, (iv) independently developed by
LHT without use of Parent's or Company's confidential information, (v) disclosed
without similar restrictions to a third party by Parent and/or Company, (vi)
approved by Parent and/or Company for disclosure or (vii) required to be
disclosed pursuant to a requirement of a governmental agency or law of the
United States of America or a state thereof, or any governmental or political
subdivision thereof, so long as LHT provides Parent and/or Company, as may be
applicable, with prior reasonable notice of such requirement.

This provision shall survive the termination of this Agreement for
three (3) years.

LHT's Designated Representative or Alternate may disclose such
confidential and proprietary information of the Board of Directors of Parent or
Company only to members of upper management of LHT in connection with LHT's
interests in Newco and its subsidiaries.

3.3 APPLICATION TO OTHER RIGHTS.

In the event LHT exercises any right granted under this Agreement to
acquire its pro rata share of stock or other equity interest in any subsidiary
or other Affiliate of Parent that is or will be involved in the Aerospace and
Aviation Industry, including without limitation pursuant to Article 5 hereof,
LHT shall have the same right and in the same proportion (subject to owning at
least its Pro Rata Interest as hereinafter defined) to elect directors or their
equivalent to the boards of directors or equivalent governing body of each such
subsidiary or other Affiliate as set forth above in Article 3.1, and to have
either LHT's Designated Representative or Alternate

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attend the meetings of each such subsidiary or other Affiliate of Parent as set
forth in Article 3.2.1 above, and have access to information presented in
connection with such meetings, as set forth in Article 3.2.3 above. Any
information provided pursuant to this Section shall be subject to the same
confidentiality requirements as are set forth in Section 3.2.3.

ARTICLE 4

STRATEGIC COMMITTEE

4.1 COMPOSITION OF THE STRATEGIC COMMITTEE.

Not later than November 15, 1997, Newco shall create a committee of the
Newco Board (the "Strategic Committee") which shall consist of five (5) members.
The Shareholders shall have the right to designate the members of the Strategic
Committee, subject to the terms set out below, in proportion to their respective
ownership of Shares, except that LHT shall have the right at all times while it
owns at least ten percent (10%) of the issued and outstanding Shares of Newco,
to designate at least one member of the Strategic Committee. The initial members
of the Strategic Committee shall be: (i) the President of Newco, (ii) the
Chairman of the Board of Parent, (iii) one other member from the Newco Board
designated by Parent, (iv) one other member from Parent's Board of Directors
designated by Parent in Parent's sole and absolute discretion, and (v) LHT's
designee, it being agreed that such designee shall serve as a member of upper
management of LHT.

4.2 PURPOSE OF STRATEGIC COMMITTEE.

The purpose of the Strategic Committee shall be to consider, make
recommendations and provide for the implementation of strategic planning in the
Aerospace and Aviation Industry, including future investments, changes in the
scope of Newco's and the Company's business, and governmental, regulatory and
political issues involving the Aerospace and Aviation Industry. The Strategic
Committee shall be the only body performing the aforesaid functions for Newco
and its subsidiaries, recognizing that with respect to Parent, it shall be an
advisory body to the Board of Directors of Parent. In addition, the Strategic
Committee shall be the only body performing the aforesaid functions for any new
subsidiary or other entity of Parent which directly or indirectly owns any stock
or other interest in Newco or the Company.

ARTICLE 5

AEROSPACE AND AVIATION INDUSTRY INVESTMENTS

5.1 FUTURE INVESTMENTS.

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5.1.1. RIGHT OF PARTICIPATION.

With respect to any future Investments in the Aerospace and Aviation
Industry, such Investments shall be made in Newco if (i) Newco has the
reasonable financial capability to undertake such Investment and (ii) LHT
approves the making of such Investment within 45 days of receiving a request to
approve such Investment. If LHT fails to approve such Investment within such
period, Parent will have the right to pursue such Investment without LHT having
any further involvement in such Investment.

5.1.2. RIGHT TO PARTICIPATE WITH PARENT.

In the event that Newco is not financially capable of undertaking an
Investment in the Aerospace and Aviation Industry and if Parent or Affiliates of
Parent wish to proceed with such Investment, LHT shall have the right to
participate in such Investment on similar terms as offered to Parent, or
Affiliates of Parent in an amount equal to the same percentage of Shares then
owned by LHT in Newco (the "Pro Rata Interest").

In the event that Newco is financially capable but LHT and Newco
mutually agree to seek participation of a third party in such an Investment, LHT
shall have the right to participate in such Investment on similar terms as
offered to Parent or Affiliates of Parent in an amount equal to the Pro Rata
Interest.

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5.1.3. PROCEDURE RELATING TO SECTION 5.1.2.

LHT shall confirm its desire to participate with Parent or
Affiliates of Parent within ninety (90) days of notice of a proposed Investment
in the Aerospace and Aviation Industry, or if such Investment is proposed to be
consummated within a shorter period than ninety (90) days, then at least
forty-five (45) days prior to the proposed date of consummation of the
Investment. Parent or any Affiliates of Parent shall have the right to proceed
with any proposed Investment prior to receiving LHT's decision as long as LHT
shall have received notice at least thirty (30) days prior to the consummation
of such Investment. In the event Parent or any Affiliates of Parent decides to
proceed with such Investment prior to receiving LHT's decision and LHT later
decides (but within the above referenced 90 or 45 day periods) to participate,
LHT agrees (i), in the event the party making the Investment uses outside
financing, to pay interest to Parent, or to such other Affiliate of Parent as is
appropriate under the circumstances, at the prime rate of Parent's principal
lender for the period beginning on the date of the Investment and ending on the
date in which LHT makes its decision and Investment or (ii), in the event the
party making the Investment finances the Investment itself, to pay the actual
carrying interest for the period beginning on the date of the Investment and
ending on the date in which LHT makes its decision and Investment. If LHT elects
not to participate in the Investment in the Aerospace and Aviation Industry or
does not provide its notice of election within the time periods provided, the
Investment by Parent or any of its Affiliates, may proceed without LHT outside
the corporate chain of Newco and its subsidiaries, or may be offered to a third
party on terms no more favorable than offered to LHT.

5.1.4. MUTUAL BUSINESS INTERESTS

The parties to this Agreement are aware of their mutual business
interests and mutual benefits in relation to their common ownership in Newco.
The parties are also aware that each has or may have additional business
interests which might interfere with the mutual business interests of the
parties in relation to their ownership in Newco or which might interfere with
additional business interests of the other parties to this Agreement. It is the
mutual intention of the parties to avoid such interferences and to jointly seek
amicable solutions in situations where such interferences may arise.

LHT and Newco will try to include each other as a participant in any
investment in an entity which engages in designing, procuring, manufacturing or
selling PMA aircraft engine parts; provided, however, that such inclusion is in
accordance with the rights and business intentions of such parties under this
Shareholders Agreement and the Research and Development Cooperation Agreement.

With respect to future aircraft engine PMA parts which are not produced in
accordance with Article 2.3 of the Research and Development Cooperation
Agreement, LHT and Newco shall discuss the possibilities to have such future
aircraft engine PMA parts developed, procured and/or manufactured by Newco. If
either party comes to the conclusion, in its sole discretion, that the
development, procurement and/or manufacturing of such parts by Newco would not
be in accordance with its needs and requirements, such party shall be free to
pursue such other alternative as it deems appropriate in its sole discretion.
Neither LHT nor Newco shall be

9

restricted in any way from purchasing PMA aircraft parts from any other source
at the lowest price in the market if delivery and quality are comparable to
Newco's parts.

The provisions of Section 5.1.4 are intended only as an expression of the
parties' present intentions and are not intended as legal obligations or legally
binding commitment on any party to this Agreement.

5.2 LHT'S RIGHT TO PARTICIPATE IN DEBT FINANCING FOR NORTHWINGS
ACQUISITION.

LHT shall have the right to participate in up to twenty percent (20%) of
the debt financing provided by Parent to Newco in connection with Newco's recent
acquisition of Northwings Accessories Corp., a Florida corporation
("Northwings") on terms acceptable to LHT and no less favorable than those
agreed to by Parent or its Affiliates. The amount to be financed shall be
reduced by earnings of Northwings from the date of acquisition. The interest
rate for any debt financing provided by the Shareholders of Newco shall be the
same for each Shareholder. In the event LHT does not elect to contribute any
amount up to twenty percent (20%) of any shareholder loan financing in
connection with the acquisition of Northwings, Parent shall have the right to
finance the acquisition with any other party or to maintain the financing
itself.

ARTICLE 6

LIAISON OFFICER AND EXCHANGE OF EXPERTS

6.1 LIAISON OFFICER.

From and after Closing, LHT may provide a liaison officer to Newco on a
part time basis, designated and paid by LHT, who may coordinate sales,
marketing, engineering and business support relating to aircraft engine parts
with Newco. Moreover, Newco or its subsidiaries may provide a liaison officer to
LHT on a part time basis, designated and paid by Newco, who may coordinate
sales, marketing, engineering and business support relating to aircraft engine
parts with LHT.

6.2 EXCHANGE OF EXPERTS.

The Company and LHT may develop an exchange program whereby personnel from
each having expertise in engineering and aircraft engines may be exchanged on a
part-time basis on mutually agreeable schedules, with the costs of each such
exchange to be borne by the party employing such personnel and making the
exchange. Each party participating in the exchange agrees to make reasonable
office space, furnishings and telephone and telecopy facilities available to
personnel exchanged by the other party during the term of the exchange. In
addition, the Company and LHT hereby agree to be bound by the same
confidentiality obligations agreed to by LHT in Article 3.2.3 hereof with
respect to any confidential information exchanged between the parties under this
Article 6.2.

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ARTICLE 7

PREEMPTIVE RIGHTS

7.1 PREEMPTIVE RIGHTS.

On and after the Closing, and so long as LHT owns at least ten percent
(10%) of the issued and outstanding shares of Newco, the Articles of
Incorporation of Newco shall provide for preemptive rights such that if Newco
authorizes the issuance or sale of additional Newco securities (other than as a
dividend on the outstanding Common Stock), Newco shall first offer to sell LHT a
percentage of such additional securities equal to LHT's proportionate interest
in Newco at the then most favorable price and other terms offered to any other
Person in connection with such offering. The Articles of Incorporation or their
equivalent of any subsidiary or Affiliate of Parent involved in the Aerospace
and Aviation Industry in which LHT acquires stock or other equity interest shall
provide for the preemptive rights as set forth in this Article in form and
substance acceptable to LHT and effective upon acquisition by LHT of the stock
or other equity interest therein.

7.2 PROCEDURE.

LHT shall exercise its preemptive right by delivering a written notice to
Newco setting forth the number or amount of securities to be purchased by LHT
within ninety (90) days, or such shorter period of time if the Newco Board
determines in good faith that there exists a bona fide business emergency for
such shorter period of time which in no event shall be less than forty five (45)
days, of receipt of Newco's written notice describing in reasonable detail the
stock or securities being offered, the purchase price thereof, the payment terms
and LHT's percentage allotment. During such ninety (90) day period, LHT may
elect to either purchase all or any portion of the securities offered by Newco
under this Article. LHT agrees to use its reasonable best efforts to secure an
exercise decision in a shorter period of time in such an emergency.
Notwithstanding, in the event LHT takes longer than forty-five (45) days to
exercise its preemptive right, LHT agrees to pay interest to Parent, or such
other Affiliate of Parent as is appropriate under the circumstances, at the
prime rate of Parent's principal lender on the purchase price of the additional
Shares offered to LHT for the period beginning forty-five (45) days after notice
and ending on the date in which LHT makes its exercise decision. Upon expiration
of the offering period, Newco may within ninety (90) days sell the additional
securities which LHT has not elected to purchase, on terms no more favorable
than offered to LHT, to any third party including Parent or any Affiliate
thereof. Any stock or securities offered or sold by Newco after such ninety (90)
day period must be re-offered to LHT pursuant to the terms of this Article.

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ARTICLE 8

RESTRICTIONS ON AND RIGHTS OF LHT WITH RESPECT TO PARENT

8.1 RESTRICTION ON ACQUIRING SECURITIES OF PARENT.

Except in the event of a bona fide tender offer for Parent by any Person
not Affiliated with LHT, LHT shall not, directly or indirectly, acquire, enter
into an agreement to acquire, or participate in any way in connection with the
solicitation of proxies or consents for, the voting securities of Parent, or aid
or encourage any other Person from so doing. The exclusive remedy of Parent
under this Article 8.1 will be to seek injunctive relief in a court of competent
jurisdiction in the United States to stop LHT from acquiring any of the voting
securities of Parent, provided that any voting securities acquired in violation
of this Section 8.1 shall not be voted by LHT or by anyone holding LHT's proxy.

8.2 RIGHTS OF LHT WITH RESPECT TO SALE OF OR TENDER OFFER FOR PARENT.

In the event that the Board of Directors of Parent wishes to sell over
fifty percent (50%) of the voting securities or assets (other than in the
ordinary course of business) of Parent or if someone commences a tender offer to
acquire, or acquires, sufficient shares of the common stock of Parent to trigger
its existing shareholders rights plan, then, to the extent the Board of
Directors of Parent desires to proceed with a sale of Parent , LHT shall have
the right, on the same basis as any other bidder, to participate in the bidding
for whatever shares or assets Parent wishes to ultimately sell to a potential
bidder. Parent agrees not to consummate any such sale until at least thirty (30)
days have expired from the time that Parent has communicated to LHT (or LHT
senior management has become aware) of the commencement of such a sale or a
hostile offer for Parent. During this period, and subject to LHT agreeing to a
confidentiality agreement in substantially the same form as that required of
other bidders in any such sale or hostile takeover attempt, Parent will give LHT
the same access to confidential information that it gives to other potential
bidders. The Board of Directors of Parent shall retain the right to select the
bidder based on the exercise of its fiduciary duties. The rights of LHT under
this Article 8.2 shall not be applicable to a merger (other than a merger in
which cash consideration is in excess of fifty percent (50%) of the total
consideration received in the merger) in which fifty percent (50%) or more of
the directors of Parent continue in office immediately after the merger. The
exclusive remedy of LHT under this Article 8.2 will be to seek injunctive relief
in a court of competent jurisdiction in the United States to permit it to bid
for the shares or assets of Parent on the same basis as any other bidder as
provided in this Article. The rights of LHT pursuant to this Section 8.2 are
subject to the fiduciary duties of the directors of Parent and the rights of the
shareholders of Parent.

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ARTICLE 9

RIGHTS OF FIRST REFUSAL

9.1 PARENT'S RIGHT OF FIRST REFUSAL.

If LHT desires to transfer, directly or indirectly, all or any portion of
the Acquired Shares or other equity interests acquired in other entities
pursuant to the provisions of this Agreement ("Equity Interests") to a bona fide
third party purchaser, (excluding any wholly owned subsidiaries of LHT, and
shall not be a direct or indirect competitor of Parent, Newco or the Company),
LHT must provide Parent with a first right of refusal, and give notice to Parent
and Newco of the proposed transfer including (i) the name of the proposed
transferee(s), (ii) the number of shares or other Equity Interests desired to be
transferred (the "Offered Shares"), (iii) the price per share or other Equity
Interest and other material terms of the offer, and (iv) an offer to sell the
Shares to Parent on the same terms. Any such transfer by LHT shall include all
other interests that LHT has acquired pursuant to the rights granted under this
Agreement if the transfer is of ten percent (10%) or more of the Acquired
Shares. Parent shall have an irrevocable right to purchase all or a portion of
the Offered Shares upon the terms of LHT's notice, and shall be required to
provide notice of its intent to purchase the Offered Shares within ninety (90)
days after delivery of LHT's notice (the "Initial Period"). If Parent elects to
purchase all or any portion of the Offered Shares, it must pay the purchase
price within the ninety (90) day period following the Initial Period upon
delivery of the share certificates representing the Offered Shares, properly
endorsed for transfer. If fewer than all of the Offered Shares are elected to be
purchased by Parent, LHT may then transfer, subject to compliance with all
applicable state and federal securities laws, the remaining Offered Shares to a
third party at any time within the ninety (90) days after the Initial Period on
terms no more favorable than in LHT's notice. The rights of Parent under this
right of first refusal shall be exercisable by any direct or indirect Affiliate
of Parent.

9.2 LHT'S RIGHT OF FIRST REFUSAL.

If Parent desires to transfer, directly or indirectly, all or any portion
of its Shares in Newco, any other Equity Interests, or of any Newco subsidiary
or substantially all of Newco's assets or substantially all of the assets of any
of Newco's subsidiaries or any of the Equity Interests to a bona fide third
party, (excluding any wholly owned subsidiaries of Parent), Parent must give
notice to LHT and to Newco of the proposed transfer including (i) the name of
the proposed transferee(s), (ii) the number of Shares for other Equity Interests
or assets desired to be transferred (collectively, the "Offered Shares or
Assets," or individually the "Offered Shares" and the "Offered Assets"), (iii)
the price per Share, other Equity Interest or for the Assets and other material
terms of the offer, and (iv) an offer to sell the Offered Shares or Assets to
LHT on the same terms. LHT shall have an irrevocable right to purchase all or a
portion of the Offered Shares or Assets upon the terms of Parent's notice, and
shall be required to provide notice of its intent to purchase the Offered Shares
or Assets of Newco or Newco's subsidiaries within ninety (90) days after
delivery of Parent's notice (the "Initial Period"). If LHT elects to purchase
all or any portion of the Offered Shares or Assets, it must pay the purchase
price upon delivery of the share certificates representing the Offered Shares,
properly endorsed for transfer, or the Offered Assets within the Initial Period.
If fewer than all of the Offered Shares or Assets are elected to be

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purchased by LHT, Parent may then transfer, subject to compliance with all
applicable state and federal securities laws, the remaining Offered Shares or
Assets to a third party at any time within the ninety (90) days after the
Initial Period on terms no more favorable than in Parent's notice.

ARTICLE 10

RIGHTS OF LHT AND TRANSFEREE IN EVENT OF
PARTIAL TRANSFER OF SHARES BY LHT

In the event LHT transfers Acquired Shares pursuant to any Article of this
Agreement, LHT's transferee shall not retain any of LHT's rights granted under
Articles 3, 4, 5, 6, 7, 8, 9.2, 12, 13 and 15 of this Agreement but will remain
subject to all its obligations under this Agreement, including its obligations
under such Articles, provided however, if LHT maintains ownership of at least
ten percent (10%) of the issued and outstanding Shares of Newco, LHT may retain
or grant to any transferee, together with the respective Shares transferred, the
right to appoint one of its LHT Directors to the Newco Board. Notwithstanding
the foregoing, Parent reserves the right to approve or reject any individual
candidate designated by LHT's transferee based on the candidate's fitness and/or
personality. If LHT owns less than ten percent (10%) of the Shares of Newco, LHT
shall lose its rights under the following sections of this Agreement: Articles
3, 4, 5, 6, 7, 8, 9.2, 12, 13 and 15 but will remain subject to all its
obligations under this Agreement, including its obligations under such Articles.

ARTICLE 11

BUY AND SELL OF NEWCO SHARES

11.1 RESTRICTION ON TRANSFER DURING HOLDING PERIOD.

Unless it occurs indirectly as a result of the acquisition or merger of
LHT or Parent, during the first three (3) years of this Agreement, neither LHT
nor Parent shall transfer all or any portion of their Shares of Newco.

11.2 CHANGE IN CONTROL OF LHT.

In the event of a change in control of LHT, Parent shall have the right to
purchase and LHT shall be obligated to sell all of LHT's Shares in Newco to
Parent upon mutually agreeable terms. In the event LHT and Parent cannot
mutually agree to a purchase price within the forty-five (45) day period
subsequent to LHT's notice to Parent of such change in control, the price of
LHT's Newco Shares shall be determined by a mutually agreeable independent
investment banking firm or independent accounting firm having experience in the
Aerospace and Aviation Industry. If the parties cannot agree upon an independent
investment banking firm or accounting firm within thirty (30) days from the
expiration of the prior forty five (45) day period, the parties shall request
the American Arbitration Association to select an independent investment banking
or

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accounting firm. For purposes of this Article, a change in control of LHT shall
mean (i) the acquisition by any person of beneficial ownership of more than
fifty percent (50%) of either the then outstanding shares of common stock of LHT
or the combined voting power of LHT's then outstanding voting securities or (ii)
LHT is not Affiliated with an entity operating a major international airline
having at least 150 major commercial aircraft.

11.3 RESTRICTION ON SALE BY LHT TO COMPETITOR.

Notwithstanding any provision contained in this Agreement, LHT shall not
authorize the transfer of any of its Newco Shares to any third party who is, or,
to LHT's knowledge, intends to become, a direct or indirect competitor of Newco,
the Company or Parent or any of their Affiliates without the prior consent of
Parent.

ARTICLE 12

CERTAIN COVENANTS

12.1 REVIEW OF INCOME TAX RETURNS AND COMPUTATION OF HYPOTHETICAL
SEPARATE TAX LIABILITY OF SUB.

Parent shall provide any and all Income Tax Returns of Parent to LHT after
such Tax Return has been filed. Parent may redact such information that is not
applicable to Newco.

Parent shall compute the Hypothetical Separate Tax Liability of Sub (as
that term is defined in the Tax Sharing and Allocation Agreement) in a manner
Parent believes to be in the best interests of Newco. LHT shall have the right
at its expense to review all work papers, procedures and any other relevant
information used to prepare such Income Tax Returns as is necessary to determine
the Hypothetical Separate Tax Liability of Sub. If LHT, after delivery of the
Income Tax Return, notifies Parent in writing that LHT requests additional
information reasonably relating to the determination of the Hypothetical
Separate Tax Liability of Sub (as that term is defined in the Tax Sharing and
Allocation Agreement), then Parent shall provide any such information within a
reasonable period of time. Parent, and if necessary, their representatives,
shall discuss and resolve all inquiries and disputes that LHT may have to the
Parent's determination of the Hypothetical Separate Tax Liability of Sub. In the
event Parent and LHT are unable to reach an agreement as to one or more disputed
items, Parent shall determine the Hypothetical Separate Tax Liability of Sub in
a manner that it believes to be in the best interests of Newco. To the extent
that the correct amount of the Hypothetical Separate Tax Liability exceeds the
amount that was previously paid by Newco, the Parent Group shall promptly refund
such amount to Newco. To the extent that the correct amount of the Hypothetical
Separate Tax Liability of Sub is less than the amount that was previously paid
by Newco, Newco shall promptly pay such amount to Parent.

LHT shall reimburse Parent for any out of pocket expenses attributable to
the foregoing, including but not limited to, any reasonable fees incurred by
Parent's accounting firm in

15

connection with providing the requested information, and in participating in
discussions with LHT's representatives; provided, however, if any inquiry
results in a refund to Newco of part or all of the Hypothetical Separate Tax
Liability of Sub that was previously paid by Newco to Parent, then LHT and
Parent shall each pay fifty percent (50%) of Parent's out of pocket expenses
that are attributable to such inquiry.

12.2 LHT'S RIGHTS IN CONNECTION WITH TAX CONTROVERSIES.

Parent shall notify LHT promptly in writing if Parent or Newco receives
any material inquiry relating to Newco (including without limitation any
communication, notice of proposed audit, revenue agent's report or notice of
proposed adjustment) from the Taxing Authority concerning any taxable year for
which Parent or Newco filed a Tax Return. Upon request, Parent shall promptly
provide to LHT copies of any and all written communications to or from any
Taxing Authority relating to Newco. Parent, and if necessary, their
representatives, shall discuss and answer all inquiries that LHT may have
regarding communications with the Taxing Authority relating to Sub. Parent shall
act in a manner that it believes to be in the best interests of Newco when
resolving any inquiry by a Taxing Authority relating to Newco.

ARTICLE 13

CERTAIN GUIDELINES

13.1 DIVIDENDS.

Within sixty (60) days of Closing, Newco shall adopt general dividend
payout targets providing for the declaration of dividends at least annually in
the amount of eighty percent (80%) of available cash flow to the Shareholders.
Notwithstanding, the declaration and payment of dividends by Newco (as well as
its related determination of available cash flow, to the extent not inconsistent
with the debt to equity ratio guideline below) shall be subject to the sole
discretion of the Newco Board.

13.2 DEBT TO EQUITY RATIO.

Newco shall use its reasonable best efforts to maintain at all times a
maximum debt to equity ratio of 3:1 (i.e. 75% of debt and 25% of equity) on a
consolidated basis. Notwithstanding, the decision to incur any indebtedness by
Newco above such 3:1 ratio shall be subject to the sole discretion of the Newco
Board, provided such action is taken pursuant to specific resolution adopted by
the Newco Board.

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ARTICLE 14

ALLOCATION OF OVERHEAD

Subject to the provisions of the Tax Allocation and Sharing Agreement of
even date, Parent agrees that there shall be no allocation of intercompany
charges to Newco and its subsidiaries for expenses of Parent and/or any other
Affiliate of Parent, except for charges that would otherwise be incurred by
Newco or its subsidiaries on a separate company basis in the ordinary course of
business. The allocable costs shall also include (i) the fair value of stock
options in Parent, as determined in accordance with FASB 123, which will be
issued to employees or consultants of Newco after Closing, and to a senior
consultant of Newco agreed to in writing by LHT, and (ii) the fair value of
contributions to Parent's 401K Plan, or subsequent equivalent plan, for
employees of Newco after Closing which are made in shares of common stock of
Parent in lieu of cash or other contributions. Charges incurred on a separate
company basis in the ordinary course of business do not include any management
fees or general corporate or administrative overhead related to Parent or its
Affiliates outside of Newco, except as agreed to in writing by LHT.

ARTICLE 15

APPROVAL OF CERTAIN TRANSACTIONS

15.1 APPROVAL OF LHT DIRECTORS.

From and after the Closing, Newco and/or its subsidiaries shall not take,
without the affirmative vote of each of the LHT Directors, any action to cause
Newco and/or any of its subsidiaries to:

(i) alter, amend or repeal their Articles of Incorporation in a manner
that would violate LHT's rights under this Agreement;

(ii) alter, amend or repeal their Bylaws in any way that would violate
LHT's rights under this Agreement;

(iii) liquidate or dissolve Newco and/or any of its subsidiaries;

(iv) materially change the organizational form of Newco or any of its
subsidiaries or effect a material recapitalization or material
reorganization of Newco or any of its subsidiaries engaged in a
business in the Aerospace and Aviation Industry;

(v) engage in any other business activities other than the research,
development, production, commercialization and servicing of
equipment, products, parts and systems related to the Aerospace and
Aviation Industry;

(vi) engage in any business transaction with Parent or its Affiliates on
terms materially

17

less favorable to Newco and/or its subsidiaries than Newco and/or
its subsidiaries could otherwise obtain from unaffiliated parties;
and

(vii) directly, or indirectly, merge, consolidate, enter into a business
combination, joint venture or other type of Investment with any
other Person.

Parent hereby agrees not to cause Newco and its subsidiaries to breach any
of their obligations under this Section 15.1.

15.2 GOOD FAITH CONSULTATION REQUIREMENT.

Newco agrees to consult in good faith with LHT and/or the LHT Directors
before Newco: (i) incurs any indebtedness, loans or guarantees or makes any
capital expenditures for a project at any time in excess of $1,000,000 which is
outside the ordinary course of business of Newco; or (ii) grants stock options
or similar stock based interests of Parent per annum in excess of five percent
(5%) of Parent's then issued and outstanding shares of common stock to Newco and
its subsidiaries employees and consultants. After such good faith consultation,
Newco shall have the right to make the final decision.

ARTICLE 16

LEGEND

Each certificate evidencing Shares and each certificate issued in exchange
for or upon the transfer of any Shares shall bear the following legend:

"NEITHER THESE SHARES, NOR ANY PORTION THEREOF OR INTEREST THEREIN,
MAY BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (EACH SUCH ACTION, A "TRANSFER") UNLESS SUCH
TRANSFER COMPLIES WITH THE PROVISIONS OF THE SHAREHOLDERS AGREEMENT
DATED AS OF OCTOBER 30, 1997 AMONG THE ISSUER OF SUCH SECURITIES AND
CERTAIN OF THE ISSUER'S SHAREHOLDERS, AS AMENDED AND MODIFIED FROM
TIME TO TIME, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
ISSUER AND WILL BE FURNISHED TO ANY SHAREHOLDER ON REQUEST. BY
ACCEPTANCE OF THIS CERTIFICATE, EACH HOLDER HEREOF AGREES TO BE
BOUND BY THE PROVISIONS OF THE SHAREHOLDERS AGREEMENT. THESE SHARES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AT HOLDER'S
EXPENSE, AN OPINION (SATISFACTORY TO THE ISSUER) OF

18

COUNSEL (SATISFACTORY TO THE ISSUER) THAT REGISTRATION IS NOT
REQUIRED."

Newco shall imprint such legends on certificates evidencing Shares held by
the Shareholders. Newco agrees that it shall not issue any new securities either
in exchange for or upon the transfer of any Shares unless the certificates
evidencing such securities (to the extent such new securities are Shares and
subject to this Agreement after such transfer) are imprinted with the legend set
forth above. The legend set forth above shall be removed from the certificates
evidencing any securities which cease to be Shares.

ARTICLE 17

TRANSFERS

17.1 TRANSFERS.

Prior to transferring any Shares to any Person, the transferring
Shareholder shall cause the prospective transferee to be bound by all the
provisions of this Agreement and to execute and deliver to Newco and the other
Shareholders a counterpart of this Agreement.

17.2 TRANSFERS IN VIOLATION OF THIS AGREEMENT.

Any transfer or attempted transfer of any Shares in violation of any
provision of this Agreement shall be void, and Newco shall not record such
transfer on its books or treat any purported transferee of such Shares as the
owner of such Shares for any purpose.

ARTICLE 18

ENCUMBRANCE OF NEWCO'S ASSETS BY PARENT

Newco may grant a security interest in Newco's assets in connection with a
financing in which the proceeds will be used by the Parent, but only for the
limited purpose of securing a credit facility with any financial institution,
provided however, that such financial institution agrees to remit to LHT,
subject to the rights of the creditors of Newco, an amount equal to the
percentage of the Shares of Newco then owned by LHT multiplied by any amount
recovered by such financial institution upon the sale of any of Newco's assets
in the event of a foreclosure.

ARTICLE 19

MISCELLANEOUS

19

19.1 AFTER-ACQUIRED SHARES.

All of the provisions of this Agreement shall apply to all of the Shares
now owned by or which may be issued or transferred hereafter to any of the
parties hereto or any Persons who are required hereby to become parties hereto
in consequence of any additional issuance, purchase, exchange, conversion or
reclassification of Shares, corporate reorganization, or any form of
recapitalization, consolidation, merger, share split, share dividend or
distribution, or transfer or which are acquired by such Person in any manner
whatsoever.

19.2 AMENDMENT AND WAIVER.

Except as otherwise provided herein, no modification, amendment or waiver
of any provision of this Agreement shall be effective against the parties hereto
unless such modification, amendment or waiver is approved in writing by each
party hereto. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms. The parties hereto
agree that the addition of new parties to this Agreement (including pursuant to
Article 17.1) shall not constitute a modification, amendment or waiver of this
Agreement.

19.3 SEVERABILITY.

Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement in such
jurisdiction or affect the validity, legality or enforceability of any provision
in any other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

19.4 ENTIRE AGREEMENT.

This Agreement constitutes the entire agreement of the parties hereto and
supersedes all prior or contemporaneous negotiations, understandings,
agreements, representations, proposals, discussions, and communications, whether
oral or in writing with respect to the transactions contemplated hereby except
for (i) the Stock Purchase Agreement, dated as of October 30, 1997, by and
between HEICO, Newco and LHT; (ii) the Research and Development Cooperation
Agreement, dated as of October 30, 1997, by and between Newco and LHT; (iii) the
Tax Sharing Agreement, dated as of October 30, 1997 by and between HEICO and
Newco and (iv) existing purchase orders entered into in the normal course of
business. This Agreement may not be changed or terminated orally but may only be
modified by an agreement only in writing signed by a duly authorized officer of
the party against whom enforcement of any such waiver, change, modification,
extension, discharge or termination is sought to be bound.

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19.5 SUCCESSORS AND ASSIGNS.

Except as otherwise provided herein, this Agreement shall bind and inure
to the benefit of and be enforceable by the Shareholders and their successors
and assigns.

19.6 COUNTERPARTS.

This Agreement may be executed in multiple counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same agreement.

19.7 CURE PERIOD.

It is hereby agreed and acknowledged by each Shareholder, Newco, and the
Company that a violation or default by any of the parties of any or all of the
covenants and/or obligations contained in this Agreement shall not be deemed a
breach unless such a violation or default is not cured within thirty (30) days
from written notice to the defaulting party by any other party.

19.8 FURTHER ASSURANCES.

The Shareholders hereby covenant and agree that if at any time after the
date hereof any further action is necessary or desirable to carry out the
purpose of this Agreement, they shall execute and deliver any further
instruments or documents and take all such necessary action that may reasonably
be requested by the other party.

19.9 ATTORNEYS' FEES.

If any action is taken to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to its reasonable costs and
expenses, including attorneys' fees from the non-prevailing party in addition to
any other relief to which that party may be entitled.

19.10 NOTICES.

All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below and to any other recipient at the address and telecopier
numbers indicated on Schedule 2.1 attached hereto and to any subsequent
Shareholder subject to this Agreement at such address and telecopier numbers as
indicated by Newco's records, or at such address or to the attention of such
other Person as the recipient party has specified by prior written notice to the
sending party.

This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida.

19.12 JURISDICTION; SERVICE OF PROCESS.

Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement shall be brought against any of the
parties exclusively in the courts of the State of Florida, County of Dade, or,
if it has or can acquire jurisdiction, in the United States District Court for
the Southern District of Florida, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world pursuant to the rules of the court
under which the action is filed in Dade County, Florida.

19.13 DESCRIPTIVE HEADINGS.

The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.

19.14 CONSTRUCTION.

The parties hereby acknowledge that this Agreement was initially prepared
by LHT solely as a convenience and that all parties and their counsel have read
and fully negotiated all the language used in this Agreement. The parties
acknowledge and agree that because all parties and their counsel participated in
negotiating and drafting this Agreement, no rule of construction shall apply to
this Agreement which construes any language, whether ambiguous, unclear or
otherwise,

22

in favor of, or against any party by reason of that party's role in drafting
this Agreement.

19.15 FAILURE OF NEWCO TO RECEIVE PAYMENT UNDER THE RESEARCH AND
DEVELOPMENT COOPERATION AGREEMENT.

In the event that Newco properly draws under the letter of credit provided
by LHT pursuant to Article 4 of the Research and Development Cooperation
Agreement and for any

23

reason the issuing bank refuses to make payment under such letter of credit,
even if prevented to do so by a restraining order or injunction issued by a
court of competent jurisdiction, Newco shall give LHT 30 days written notice of
such event. In the event that LHT fails to pay or cause the payment of such
letter of credit within such 30 day period, then, until such time as Newco
receives full payment under the letter of credit or otherwise, including any
other amounts owed by LHT pursuant to Article 4 of the Research and Development
Cooperation Agreement, all the rights of LHT, but not the obligations, under
Articles 3, 4, 5, 6, 7, 8, 9.2, 12, 13, and 15 of this Agreement and the right
to select PMA's under Section 2.3 of the Research and Development Cooperation
Agreement, shall be suspended. This suspension of rights shall be in addition to
any and all remedies available to Newco for breach of such payment obligations
under Article 4 of the Research and Development Cooperation Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

(1) Gives effect to the Company's September 1996 acquistion of Trilectron,
its September 1997 acquisition of Northwings and its October 1997 sale
to Lufthansa of a 20% minority interest in the Company's Flight Support
Group as if each of such transactions had been consummated as of
November 1, 1995.

(2) Gives effect to the Company's September 1997 acquistion of Northwings
and its October 1997 sale to Lufthansa of a 20% minority interest in
the Company's Flight Support Group as if each of such transactions had

Subsidiaries of the Company, all of which are directly or indirectly
wholly-owned (except for HEICO Aerospace Holdings Corp., which is 80%-owned),
are included in the Company's consolidated financial statements.

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration
Statement of HEICO Corporation on Form S-3 of our report dated December 27,
1996 (September 9, 1997 as to Note 15), appearing in and incorporated by
reference in the Annual Report on Form 10-K of HEICO Corporation for the year
ended October 31, 1996 and to the reference to us under the heading "Experts"
in the Prospectus, which is part of this Registration Statement.

Deloitte & Touche LLP

Miami, Florida
November 5, 1997

DE LA OSA & ASSOCIATES, P.A.
CERTIFIED PUBLIC ACCOUNTANTS

Heico Corporation
3000 Taft Street
Hollywood, FL 33021

NORTHWINGS

CONSENT

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
HEICO Corporation on Form S-3 of our report dated June 30, 1997, appearing in
the Current Report on Form 8-K of HEICO Corporation dated September 16, 1997 and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.

We consent to the incorporation by reference in this Registration Statement of
HEICO Corporation on Form S-3 of our report dated March 12, 1996, appearing in
the current report on Form 8-K of HEICO Corporation dated September 16, 1996 and
to the reference to us under the heading "Experts" in the Prospectus as it
relates to these financial statements which is part of the Registration
Statement.